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Guest Post: Gold Will Soar as the U.S. Dollar Bubble Bursts
Submitted by Mike Krieger of Kam LP
I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
- Thomas Jefferson
Gold Will Soar as the U.S. Dollar Bubble Bursts
I haven’t taken the time to write about gold in length as of late because quite frankly there is so much quality stuff being written about it at this point. In addition, the understanding of the monetary system and the dangers of fiat money in general is so much better than it was even a year ago. Nevertheless, while the understanding is considerably better it remains poor. While it has become a bit cliché, the statement that “gold is not going up but the dollar is going down” is the most important concept for every investor and indeed citizen to understand at this point. Completely wrapping one’s head around this concept may very well be the difference between economic survival and complete destruction in the years ahead. For when you truly comprehend this notion you stop thinking about gold in terms of its price and you can then make a rational decision about where it is going. Gold is not up 23% this year to $1,345/oz, rather the U.S. dollar has depreciated by 23% versus the world’s neutral money supply, gold. As we all know by now, there is no limit to the amount of money Banana Ben Bernanke can or will print. Thus, gold’s theoretical upside is infinite in a purely paper money world. Once you understand this, you recognize that gold is not the bubble but rather the biggest bubble on planet earth today is the U.S. dollar itself.
The Dollar Bubble Grows as FX Reserves Surge Globally
French enlightenment giant Voltaire said back in the 18th century that “paper money eventually returns to its intrinsic value – zero.” Indeed, this is the basic economic history of the world and not really such a profound statement, yet most people in the United States today have no idea what sort of immovable force they are fighting against by storing a their “wealth” in increasingly worthless pieces of paper backed by nothing that we call U.S. dollars. One of the most bullish factors behind the current gold bull market and one that will drive the price multiples beyond where it stands today receives much too little attention. While a lot of attention is placed on the low percent of FX reserves that are held in gold by the BRIC nations and other fast growing emerging economies what is not discussed is that rate at which these FX reserves are growing in the first place. While the fact that China’s FX reserves soared to $2.65 trillion as of the end of September made plenty of headlines, not enough people pointed out the fact that this represents a 17% year-over-year growth rate. The implications of this are clear. Everyone knows that the BRIC nations and many others own a woefully inadequate amount of gold in tonnage terms, but especially with respect to a percentage of total FX reserves. While the latest Chinese gold data is only from April 2009 and the amounts are surely considerably higher, this is beside the point I am trying to make. The key point is that if it’s FX reserves are growing at 17% then China has to increase its gold reserves by that amount just to keep the % FLAT. Forget about increasing it. It’s not just China though. It is the whole world. Russia’s FX data recently came out and guess what? FX reserves soared 19% year-over-year to $503 billion. Russia provides more up to date data on its gold reserves and they are actually up 27% year-over-year. Nevertheless, Russia has previously stated that it wants it share of gold to reserves to get to10%. Despite the tremendous buying the percentage has only been moving up slowly and currently stands at 6%. This is a function of the dollar bubble and the impact it has had on Russia’s FX reserves.
What investors seem to overlook is the fact that when countries fight back in this highly destructive currency war they print their own currencies and then buy dollars to keep their currencies from appreciating too rapidly. Let’s take a look at Brazil. They have been in the news lately as the Finance Minister has made a stink about the U.S. policies with regard to the way the FED is defiling the dollar. They have been all over the market trying to prevent a more significant appreciation of the real. Well guess what? As of the latest FX data they now have $283 billion in reserves, which represents an incredible 21% increase year-over-year. Unfortunately for Brazil, they basically have no gold and don’t appear to be buying. Perhaps the leaders over there just don’t have a clue, or perhaps it’s because they don’t have nuclear weapons. If you take a look at the countries with massive and growing FX reserves the ones that are actively and aggressively buying gold have either nuclear weapons or some sort of significant military deterrent to the U.S. Look at Japan and South Korea on the flip side. Japan has about 3% of its FX reserves in gold and South Korea has 0.2%. More importantly, neither nation has been adding to their stockpiles. While South Korea made some comment about adding gold they probably will have to think twice considering the troops we have in their backyard.
Sadly enough, many of the fastest growing countries in the world simply do not have the geopolitical might to shift some of their increased dollars into gold. At least not officially or out in the open. This is probably partly why they are so angered by U.S. dollar policy. Essentially we are stuffing ticking time bomb assets into their FX reserves (dollars and dollar related assets) and they are forced to accept these soon to be confetti “assets” as payment. Jim Rickards wrote an excellent piece a while back where he likened U.S. treasuries to opium that the British forced the Chinese to accept as payment during the 19th Century. The article is excellent and can be read here http://www.dailypaul.com/node/144070.
Buy Physical Gold While You Can
Fortunately, we as American citizens do have the right to buy as much physical gold as we want at this stage and now is the time to do so. By saying this I do not mean that gold cannot go down from here. Of course, if the markets experience a huge spasm after the elections and the next Fed meeting, gold could certainly pullback violently. The people that I am trying to reach today are those that have not yet bought a reasonable amount of physical gold (not GLD!!!). This is because I think the window of opportunity to buy at anywhere near the current level is fast closing. Pretty soon, it is going to be clear to everyone exactly what is being done to the dollar and what this means. Think about it this way. There are roughly 230 million adult Americans around today. What if each one of them realizes that what Thomas Jefferson warned about in the quote at the top has already happened. Go back and read that quote and think about the Fed, the bank bailouts and the foreclosure scandal. This is the oldest trick in the book and we continue to fall for it while mindlessly watching Snookie prance around on the Jersey Shore. What if this awakening caused each adult to go out and buy just ONE ounce of physical gold. This amounts to over 7,000 tons!!! This is only slightly below what the U.S. government supposedly has stored in Fort Knox and elsewhere. It is 2.8 times the amount of gold that is mined each year. While I understand that this scenario is unlikely, we are only talking about one nation and we are only talking about one ounce each. Even if the richest 10% bought one ounce it would still be 720 tons, or 30% of annual supply. You see the math just doesn’t work at these prices. People are climbing the learning curve and doing it fast. If you wait until the tipping point there is a very good chance you will never be able to get your hands on the supply you desire. Good luck and use your head that’s what it is there for.
All the best,
Mike
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are mike kreiger and turd ferguson one in the same?
come to think of it, i don't think i've seen either in the same place at the same time.
best guesses as to the timing of the tipping point anyone?
Just my 2-cents as far as timing: I think we are potentially approaching major inflection point. If 1. the Fed decides that the new crop in the House will be less than cooperative and pushes through a huge QE@ at either of the next two Fed meetings, or if 2. the lame-duck congress passes something really outrageous (like a greedy grab for 401Ks) then I think the train will begin to inexorably to leave the station, and at a fairly fast rate- late November and early December are my potential tipping point timeline. Commodities, particularly cride oil prices, will be my canary in the coalmine to watch at this stage.
If we get through November and early December without these things and without a big commodities spike, then it will be a far slower death.
Slow death: like putting frog in pot of water then turning on heat.
Is cride oil more rarer than crude? (Just kidding)
Turd would never misquote Thomas Jefferson the way Mike did. What Jefferson said, at the end of a letter to John Taylor:
full letter: http://memory.loc.gov/cgi-bin/query/r?ammem/mtj:@field%28DOCID+@lit%28tj...
on Thu, 10/21/2010 - 11:49
#667143
Turd would never misquote Thomas Jefferson the way Mike did. What Jefferson said, at the end of a letter to John Taylor:
full letter: http://memory.loc.gov/cgi-bin/query/r?ammem/mtj:@field%28DOCID+@lit%28tj...
As your post would elude too.. you believe that history does not repeat...
Figure 1 demonstrates the extent of uncalled capital in a variety of sectors during 1870-1913. The figure reports data for only a few sectors, including banks, insurance companies, trusts, and land, mortgage, and financial companies. These sectors maintained a high amount of uncalled capital relative to the market as a whole. The high proportion of uncalled capital can be seen as a market-imposed requirement to engender confidence in sectors where leverage was high and the physical assets were either meagre or inaccessible to creditors.
Of course, as shown in Grossman (2001), state-chartered banks in US states that imposed extended liability during the Great Depression fared worse than banks in limited liability states, suggesting that the benefits of extended liability may be of limited use in the face of a financial tsunami. Nonetheless, our results have an important implication for today’s policymakers. Extending bank shareholders’ liability can protect taxpayers by directly reducing the taxpayer’s share of bank resolution costs and, more importantly, by altering the risk-shifting incentives of banks.
http://www.voxeu.org/index.php?q=node/5476
You can stay your dumb ass in the fucking kiddie pool so as not to get deep water where you can not stand, thusly must tred... and surely drown at some point... which is to say that I will not commit to you the needed time... to see you eventualy go under... so save it stupid.
Ok psycho. You're reading waaay too much into what I posted, JW. I was simply pointing out that the quote above is not accurate. Most of that was never written by Jefferson. And while the sentiment may mirror Jefferson's distrust of the banks (certainly my own), he actually ended up being in favor of paper currency over coin (during times of war) as paper dollars had saved the country through war, while coins were scarce. Also, the words "deflation" and "inflation" weren't used during his day so there's no way he would have said:
While I agree with the words, the sentiment, and beliefs expressed, I don't like when words are posthumously placed in the mouths of the dead. Especially when they said it better:
That is pure greatness. Why can we not have another Thomas Jefferson? Who could put it better?
It is amazing how the very things he spoke of in 1816 are what are tearing this country apart still today?
Thomas Jefferson and people around him have founded and built a great country.
The present leadership and/or ruling elite are destroying the country. This is the difference, and this seals the country future.
Thomas Jefferson and people around him have founded and built a great country.
The present leadership and/or ruling elite are destroying the country. This is the difference, and this seals the country future.
Thomas Jefferson and people around him have founded and built a great country.
The present leadership and/or ruling elite are destroying the country. This is the difference, and this seals the country future.
Hi, Mike here...errr, I mean Turd. Anyway...
I thought yesterday when the dollar swooned that gold would rally back to 1360. Oops. Apparently Blythe thought otherwise and she's slightly more powerful than I. If anyone still doubts the existence of the Evil Empire, pull up a 3-minute chart for the last two days in gold. You'll clearly see 4 violent, bid-overwhelming EE interventions. Blythe has successfully scared some computers into selling but I'll be very interested to see the closing OI today to see just how successful she's been with humans. As for what's next, I thought I'd re-post this from yesterday:
by Turd Fergusonon Wed, 10/20/2010 - 09:31
#664016
USDX all the way back to 77.45 yet gold is unch.
Something tells me this is just rumor-mongering BS.
If gold fails to hold 1325 and closes below there, it could move all the way back to 1300 but there should be some significant support there.
Silver looks like significant support at 23. The two support levels may coincide. Maybe tomorrow when there is no POMO. Or Monday. Either way, 1300 on the Dec10 gold and 23 on the Dec 10 silver would be terrific entry points if you get a chance.
I'll gladly stand by this for now. Gold should find great support at 1300 if it gets there. Silver looks like 22.50 is in the cards, too. Both will be seen as great entry points in the rearview mirror. Remember, EE raids such as these are commonplace. They happen. Gold is not in a bubble. A long-term top has not been made. The Comex is broken and is in the middle of collapsing. Blythe and her cronies are simply attempting "hail mary" passes to buy time, similar to Helicopter Ben. The EE is printing paper gold and silver desperately trying to suppress price.
Its like the old addage: If you owe the bank $10,000, that's your problem. If you owe the bank $10,000,000, that's their problem. Same is true here. The EE is screwed by their 100:1 leverage. When the game ends, and believe me its ending soon, they're fucked with or without all the additional paper gold contracts they've created from thin air over the past 5 days, so why not print some more? If it buys them time, so be it they say.
In the end, they'll do what they always done. Let 'em. It doesn't change the facts or the fundamentals. Gold will trade at $1500 by 12/10/10. I've maintained this for months. Nothing that has transpired over the last 5 trading days has changed my mind.
Its all paper maipulation.In Western Europe the idea appears to make the average person so poor they can,t afford to buy any,must say the EU,ECB,Spain,Portugal,Hungary,Greece,Ireland,Iceland and the UK are all doing a cracking job.UK austerity measures will effectively bankrupt huge areas with major business collapses,double dip assured.Foreign Aid not being cut and going up by 37% next year,helps dictators shop at Harrods.Sooner we hit the streets the better,in fact better make it soon before the streets are sold.Lived through the 80,s (Backside fell out of UK),90,s very similar,but today less optimism than I have ever seen and the gulf between the politicians and the people is greater than ever,becoming a real fascist state ripe for anarchy and revolution.
good to hear from you, M..., i mean Turd.
if Blythe and her bandits can continue to pull this off past the end of december i will have to re-evaluate my thoughts that they can't do this ad infinitum.
At this point my guess is that the Republicans will win bigtime in November, largely on promises of fiscal responsibility. Many people will fall for the empty promises, the $US will strengthen for a little while, and gold will fall relatively to the $US. Then, as the debt continues to skyrocket under the Republicans and people wake up to the fact that the Republicans are still no more fiscally responsible than the Democrats, gold will renew its shot into the stratosphere.
Of course, what shenanigans the Fed will pull in the meantime is somewhat open to question, though they'll probably continue to weaken the dollar and, therefore, lessen the drop that gold would otherwise have (in terms of $US) shortly after a Republican victory in November.
In any case, over time the US debt will continue to explode, the dollar will continue to collapse, and gold will continue to rise in $US, possibly until all hell breaks loose.
TJW, I concur with your analysis that the Rs will win, and that may indeed firm up the US$ for awhile.
Even with their rhetoric, at the end of the day the Republicans will not be fiscally responsible.
I also agree with you re the Fed maybe pulling some kind of a quickee.
Bottom line: as the author, Turd, and others are saying, BUY GOLD NOW!
Yes, there are only a very few true fiscal conservatives. If these guys don't manage to take control of the party, those currently in charge will simply pay lip service to financial responsibility, and will likely have us in another war before you can say "Ahmadinejad".
Looks like I will again be voting for all third party candidates.
NOW you're talking tmos!
Do,
IMHO, At this point it doesn't matter what party is IN, the damage is done, and the Fed is doing whatever it wants.(and will continue to do so),we left the Constitution long ago.
We should have called a Con Con after BHO started off doing the Chavez dance.(WTF we did not is a total mystery).
BHO, will pull an EO, or a PDD, and overide anything the GOP tries to stop.............there is no stopping this train, it left the station when the Dams took control of BOTH the Senate/House.
It's FS Ahead now, and we just get to watch.It will sound better, and attitudes will be better, for a while.
if dollar bubble bursts, interest rates could also soar. what might that do to aggregate gold demand and prices ? what is the historical precedent on this ?
I see the bullion banks are busy this morning preparing for QE2 day.
that's not the Crimex at all, it's just gold's poor fundamentals
Jon Nadler I am going to hit you so hard.
am well protected, all the JPMorgan goons are here with me to take care of me
I knew they were your buddies Jon Nadler. You're not fooling anyone.
So anyway, how come your not over at kitco.com selling rhodium?
Fresh back from vacation, I am pleased to see JonNadler back in action! Did you ever get Jamie's mansion for that weekend bash you once mentioned?
If gold goes to $50,000 will JPM still employ those goons?
Missed you dude! Glad to see you back!
you sure get to go away on vacation a lot. Italy last may 4/20. guess the bearing business is very lucrative. happy 4 U.
thanks DoCHen,
We actually had sort of a gold party, where everybody brought their jewelry and turned it in an effort to try to save the Crimex. But we only raised 50 ounces
but MsCreant snobbed me and didn't join me. Her loss, I mean I could have intoduced her to some big boys from HSBC and Goldman, but she wants to be a goldbug.
DCRB, I hope you are well rested from your travels. We need you in the fight.
Thank you MsC, Kathy, JonNadler and Rocky for the kind words.
We went to Tahiti (and other islands nearby) because this year because it is our 25th Anniversary.
Next year the austerity hammer comes down in our house!
on Thu, 10/21/2010 - 11:08
#666969
that's not the Crimex at all, it's just gold's poor fundamentals
JonNadler,
You offer one sentence of personal slander... I offer numerical facts... you feel like I am undermining the cause... You feel, like... the facts are mean? harsh? and / or not on your side? the numbers... make you feel... like? the numerical facts are the fucking numerical facts and no matter how you feel about them... they will still remain the numerical fucking facts.
So, You go ahead with your one line slander... about how you feel a certain way... maybe we can all chip in.. for all of you with feelings issues and get a discount on a larger supply of fucking midol... but I really dont care if any of your pussies hurt... because you dont like the numerical facts...
http://goldprice.org/30-year-gold-price-history.html
oh am on your side JW, come on
JonNadler is a satirical sock puppet, FYI.
You'd pick a fight with a lamp post. Whassamattah? Wife not obeying?
US Dollar Will Soar as the Gold Bubble Bursts!
absolutely ratava, it's going to 300 at the most. I've been saying this for years
Don't you mean a decade? By the way, if gold is in a bubble then why is only .8% of world wealth is invested in it, or way is it I can get a 0 down low interest loan for a house but not gold? Where are the gold dealers willing to lend me money so I can buy their gold? How about people with guns telling me I have to use gold for every transaction? Is the FED announcing and front running gold purchases?
Try Goldline or Monex... or Vinnie Bagadonets
Yes, because as we all know, the US Dollar is backed by the only thing that matters - the word of Ben Bernanke.
The U.S. Dollar is backed by U.S. Marines... and you can pout all the way to which ever camp they put you in about how un-fair it all was...
But that would be to assume that more than 5% of the Nation is capable of giving a fuck about the truth... which they are not... so this is all just talk and that’s all it will ever be is talk...
QE 2 will be in smaller amounts like QE 1 all summer long was... so as not to upset the desensitized sheepeople... would everyone like me to post links? ok...
http://www.google.com/#sclient=psy&hl=en&q=billions+in+government+funding+summer+2010&aq=f&aqi=&aql=&oq=&gs_rfai=&pbx=1&fp=1fcdface22984313
look who's back. JW thanks for coming back, i am having to fear monger gold all by myself here. Tell em how QE2 will just be a few million dollars HA HA HA HA HA
jon nadler, those who junked you dont get sarcasm. Good that you have a sense of humor.
Gonna have to get rid of that damn gold, look the floor is tipping , oh shit there goes my island done tipped over. Damn gold.
Oh yeah, and the US Marines will appreciate being paid with rapidly depreciating US Dollars.
Somehow people like you think fundamentals don't count. You're always proven wrong.
The US Marines get their food rations first. Anything left over is distrubted to us proles.
Who needs cash?
Is is astounding how few actually get it. Perhaps it's due to myopic self-referencing interest in financial markets, but the lack of general awareness regarding global political-strategic realities is shocking. Especially at a place like ZH with its vaunted 'above-average' readership.
A bet in favor of gold is not a bet against the $USD, and it's not even really a bet against the MIC. What it is is a bet against oil; specifically, our access to plentiful & affordable juice. Be careful what you wish for - if gold reaches a sufficient enough price level to bring the economy to halt, you'll need to be in an established gang (a la MS 13) to make it out alive.
If you want to see this country return to any semblance of self-governance by & for the People, you wouldn't want to see FRNs destroyed in a hyper-inflationary conflagration. No, what we need is an ordered transition away from debt based currency towards one managed by the state eg Treasury.
No matter what, we need to be able to control the means of supporting the MIC's activities in the ME, int'l sea lanes and air space. You may not like what they are doing, or what they represent (yes Virginia, the USA is a global empire), but anyone sitting at a computer freshly showered, shaved, with a mug of hot coffee, food/beer in the frig, car in the garage, etc are all complicit in keeping this game going.
There's a nation to the north of us whose border is not patrolled by MS13. It's really rather porous.
Gold is a just in case you want to leave item. You may need an ounce at the border and another one at the border wherever you end up, one or two for a boat or plane ride. You never know. It's not going to make you rich, just get you out.
Yep. And consider this: A 1% move in the US is a 9% impact up north. A 3% move down here is a 27% impact up north. At 5-6%, it surpasses 50%! Anyone getting the picture yet? Think there's an infrastructure play?
Those pussies have been relying on our muscle for generations. They wouldn't stop a flea even if they had the means - which they don't. (Read about the anguished process of allowing 'political refugees' aka economic migrants to enter their country from the Commonwealth's SE Asian countries.) Cue Kent Brockman: I for one welcome our American overlords.
So here's the problem Trav - the Great White Way will be seized once the US refugee population reaches a certain threshold. You know, we have to protect our 'citizens'. No, if you want to get out, I would suggest S. America. The other option is getting ready to tough it out right here.
Better do it quick, yank. The demographics up north are looking less and less pointy-nosed, and more and more first nations filled every year. Could there be a NA equivalent of Evo Morales in the cards for the Great (Not So) White North?
Then again with all the Andrew Jackson psychopathic hero worship in the USA you'll have those "whelps" flushed out of their dens in no time, no doubt.
Manifest Destiny 2.0. Heh, I dunno if China and Russia will go for it, but I suppose time will tell.
Canada is merely a route to S. America if the southern option is impracticable. Like in Casablanca...
This nation is already degenerate enough as it is and I don't see that changing. My Tribe doesn't practice ruthless nepotism
So a foregone conclusion, hunh?
Continental flies a daily DFW-Lima. A guy I know is married to an attendant who commutes from SoCal to handle this flight - she's been doing it for years.
Why bother going to/through Canada when Texas is going to be safer anyway? Heck, if they succeed in seceding (just need a friendly General to seize some nukes in Nebraska for protection), you might even want to stay where the new American republic will be founded.
B9 my daughter just flew back from Slovenia via Canada Air going through Canada yesterday. she said they detained her at immigrations and kept her bags and her for hours and hours and missed her flight into Denver last night. she said they just torn apart her rather large back pack looking for a bomb they thought they saw on Xray. they thought the homemade honey might be or her small cyrstal bowls. she didn't know if they took anything because they just torn her belongings apart. said shehad to then take United which sucks. can't believe this red head green eyed beautiful young lady would be suspect and just fucked with her over a non labeled honey jar.
I just know there is a point in there somewhere, but I'm already too bored with the comment to 'delve'.
FWIW: Hippy Backpackers with unlabelled jars of whatever always get the once over at customs. Sorry if it's a 'hassle'.
Somehow I think that if she wasn't searched you'd probably be posting here how her unlabelled jars of 'honey' could have been full of nitroglycerin, and how irresponsible and incompetent that would have made the Canadian border officials. Am I close?
trav7777,
All the facts and honesty in the World will not sway the out of work used car salesmen here pushing buy higher... this is an interactive sales tool, nothing more and nothing less. Tyler has to pay the bills some how right?
It gets cold up there, which requires a lot of energy. I'd go south towards the equator, which is where all people have descended from at one point.
Yep B9K9 the spoiled brat american fully SUPPORTS all this central bankster activity, until theyre a bit negatively effected by it, then theyre all flustered and mad about 'how dare these crooks do that'!
But I guarantee they were all happy when their McMasion ATM card was working fine!
So for the average american who believes 'it can never happen here', I suggest you have firearms and plenty of ammo and food stored, and that modem wont work when plugged into a fire.
Well, I don't know if it's just Americans who have become 'spoiled brats'. Seems like most of the world sure-as-hell enjoys the energy subsidy.
Travis, what's the ratio: 50:1 or something like that? LOL (That is, it would take 50+ slaves/serfs to satisfy one in the comfort to which they have become accustomed via petroleum.)
Just because central bankster activity got us to where we are today, the drive will not be to keep them and forgo oil. Rather, we will strive to replace them (since their 'debt tax' now stands in the way between us & "our" juice) and keep the oil.
That's why I just smile to myself when I see these crazy gold threads. The $USD is literally our life blood - if it goes, we go. (IOW, you won't survive to enjoy your new found gold wealth.) No, the real play will be the transition to a new national scrip.
The Fed & FRN is doomed, but the replacement will be a new greenback, not gold.
@B9K9
Would not a rapid movement of dollars into Gold dramatically reduce the price of base metals , fossil fuels and food.
Most of the extremely overvalued dollars are outside the US chasing these goods - if Ben started to bid up Gold with his dollars instead of blowing up bubbles everywhere the wealth of the mercantile states would collapse and the transfer of capital from the US towards the mercantile states would cease.
Monetary inflation is here as you know - as long as the velocity remains as it is how would it increase consumer inflation in the US ?
Indeed the destruction of the wage arbitrage model would make production much more energy efficient and would cause the biggest oil price collapse in the History of oil.
As long as Americans would accept capital construction rather then consumption there would be a Industrial renaissance in America as long as foregin dollar holders would accept a destruction of their dollar value.
I have a imperfect understanding of this dynamic so please illustrate any economic flaws in my argument beyond the very obvious political heat.
I really admire your comments and their logical contructions. You do have a grasp of the realities of the situation. It just seems unlikely that we will have anything orderly about the needed changes. This government is built in a way that precludes logical processes. After all this time, and with the current political climate, we are just getting more of the same rascals in office. They will NOT make changes until the fan is completely inundated with shit and comes to a halt. Would that orderly changes could be made! I think it's simply wishful thinking.
That's the way I've heard it too. The thing is that I've heard about the Gold Bubble for five years now. Not so much about a dollar bubble.
Johnny B. That you out there? - Ned
right here Ned!
Goled to $900 Biatchies!!!!!
I'll point out your typo Johrny Bravo: that would be $9000.
You're welcome!
no actually - it's back up the truck time as the dipshit mickey mouse google traders of US toilet paper line up to buy buy buy USD and short short short gold and silver.
Well this cat is backing up another truck called my precious, my precious, myyyy precioussss.
Then after November 2nd the bankers tip the USD dipshit train to 70 and all the rah rah dipshits come crying that gold is now in a bubble at $1650 and I ring a goddmaned manster cash register and go on VAKA to jamica for a month.
next!
Looks like I stumbled on some creepy troll Blog here.
hypertiger must be down for maintainence.
In our area there have been at least a dozen "cash for gold" places open up in the past two years. They buy gold for 50-80% of spot price, then take it to a refiner that pays out 90-95% of spot. Not a bad business with gold around $1300-1400/oz.
However, some of them are acting as "gold buyers" for wealthy investors in the area. Investors come in and offer to buy all their gold coins at spot, all their 90% silver coins at spot, etc... They will even front the cash to buy below spot. The "cash for gold" guys don't even have to put up their own money. All they have to do is drive a hard bargin for those desperate people looking to raise a little instant cash.
yep business is booming. I'm starting to see pawn shops advertising that they'll buy gold. I shake my head every time I see that or some commercial, 'sell your old worthless gold to us, c'mon, get that cash money in your hand'. More and more, we seem to be living in bizarro backwards world.
You would think at some point the margins would have to tighten with all the competition, but so far these guys still get a 20-50% spread depending on how dumb and lazy the gold seller is.
it's pretty sad that it boils down to that, but it's the truth.
if there are two things we're collectively good at, it is being dumb and lazy
You can't really blame these poor shmucks though. They probably bought a gold necklace 10 years ago when gold was what, like $300/oz? They're cash poor and to them it looks like they're doubling or tripling their money. They could give a crap about dollar debasement and all that, they have no idea what's going on.
That's true, we need to take into account the relentless conditioning. I totally get the, 'don't know, don't wanna know' attitude in our modern society. There is so much that goes on. Ask yourself, how many ideas hit you in a single day. It's probably in the thousands. If you then try to take that and wade through it all to distill some truth, you'll probably have to stop eating and sleeping just to find the time. So it is totally understandable. Still, I stand by what I said; we have no shortage of stupid and lazy, and I can't count myself outside of that group very often. I guess we sort of have to be the change we want to see in the world. I wonder what these gold shops would do if I started handing out pamphlets or something... Or maybe just a pointy sign that reads WALK RIGHT IN, GET RIPPED OFF ----->
my vote is for blind and docile
I think you hit the nail on the head with "how dumb and lazy the gold seller is."
This end of the market isn't efficient so it is up to the sellers to do their due diligence. Since they are lazy, and dumb, they don't do their homework and end up selling to the closest neighborhood buyer. If better information was available, i.e. who paid the best prices for gold, then there'd be much greater competition and the spreads would tighten.
"The Gold Guys" will come and go just like the Cabbage Patch Kids.
Just like home builders, Realtors, mortgage brokers, only a few left standing around here.
huh-ha, cabbage...
http://www.youtube.com/watch?v=LyaCLbmeVlI
.
What better way for the elotes like me to buy up all the dipshit bling fromt he dumb dumbs and then when it 9K an ounce I ring and cash register that is once a century and the bling blings take their toilet paper to the TV shop to buy the laterst idiot box that is worthless the next day.
I've been bullish on gold for the past 3-4 years and longterm I'm still bullish. But I'm selling now. I think deflationary forces in consumer items will pull commodities down. I understand all the arguments for gold 2k and 3k and more but without inflationary pressures in consumer items I don't believe it will happen. With easy money and QE I'm not sure why I can buy a gallon of milk for $2 (like the price in 1980) but I can. Or why I can buy a really nice suit for $200 but I can. Everywhere I go buy things it's two for one or 60-70% off. Until we deleverage and then begin to grow gold won't make it's big breakout. The path to gold at $3,000 is like driving a Ferrari from LA to Las Vegas. Unfortunately the path to a delevered financially sound economic platform is like fying a lear jet in the opposite direction from NY to SF
With all respect, I think you are taking a huge risk trying to time. As Yogi Bera observed, its hard to predict, especially the future. PMs have increased every year for 8 years ... this IS the big breakout and this weeks fall in the fiat price is a gift. Reconsider, my friend.
"this IS the big breakout and this weeks fall in the fiat price is a gift".
And at which point I try to convince my ignorant family, friends, and neighbors to at least buy some PM's.
But no, on speaking to their brokers about such matters they are effectively convinced that all is well. I sleep well knowing I tried, and that even with an expected correction in price, my stash is continuing to appreciate in comparision to FRN's.
Yeah, good thing taxes, insurance, tuition, utilities, cable, food, etc..are ALLl way up. Your "milk" example doesn't wash where I live. $4-5 on sale and up to $7-8 bucks a gallon in the grocery stores (Maui). The coming 2nd round of QE will be the second of a series of this. You just don't get it by the looks of it. They have no other option but to print and devalue.
Hmmmmmm...not sure I get your Ferrari and Lear Jet reference, but I agree.
For a long time to come, real, tangible, usable things are going to be th eonly things of Value (And price)., I think we are going to see a real shakeout in the want/need paradigm and the price/value paradigm over the course of this shift.
Good time to convert some of the Au to Ag or Ag-ri.
ORI
http://aadivaahan.wordpress.com
where do you get a gallon of milk for $2? I can agree with you on one thing..I don't think that you do get it....are you telling me that you are buying that you are actively buying that crap this is two for one 60-70% off? Or are you just seeing it and passing right by? cuz if you're doing the latter...guess what? that's the trend..EVERYBODY is passing right by.
Milk 2 for 1 Safeway in California. Tuition is probably not a good example. It faces tremendous deflationary pressures. How many people are going to paying 40K per year at mid tier colleges. How many kids are going to rack up 150k in debt at these colleges. Half of the mid tier private colleges will probably go bust. I pay $3000 per year tuition for two children to go to community college. I can buy a $200-300 color tv and get basic cable for very little. What kind of color tv could I get 30 years ago for $300.
Anyway all I'm saying is that deflationary pressures are here and when deleveraging has taken place and the world is awash in dollars massive inflation will take place. But I think it's a year or two at least down the road. japan's been waiting 10-15 tears for inflation despite massive QE.
My avg cost in gold was around $500 - I'm out for now and would love to get back in at $1000. maybe I never will . . .
http://shop.mywebgrocer.com/shop.aspx?&sid=43641028&sid_guid=f5a91fb9-cd...
man i'm pissed..3.99..again, at the bodegas, you're looking at $1 mark-up..WTF
Foodtown of Bed-Stuy? You need $20 of ammo just to get out of there.
Skim (better for you) $2.29 at Wegman's in Bridgewater, NJ, which is an upscale store. This is why people move to the burbs; better schools, lower prices, safer environment.
Point is, everything is relative. You have to work at spending money wisely, just like work at investing. Tuition for SUNY is +/- $7000 in state, +/- $18000 out of state which is cheaper than Rutgers for locals. You get a perfectly good education in NY (depending upon your major - there's that investment in something of value) and only miss the good ol boys club at Harvard, Yale, Princeton. "Those" people don't need to work anyway.
http://www.wegmans.com/webapp/wcs/stores/servlet/ProductListView?forwardto=ProductListView&Ne=5&Ntt=milk&langId=-1&Ntk=All&storeId=10052&Ntx=mode%20MatchAllPartial&catalogId=10002&N=207&Nty=1
lol..$20? you need $100 worth when it things really get going. that's why im part of the get the fuck outta dodge..card carrying member since '07. taking my fun bux and runnin'. not in love with the burbs..got me an unbeaten path..worse of all everyone is out manned and out gunned..cops included..interstate ATF crimes are rampant...this is my farewell tour pretty much..
Johnny Bravo, is that you?
You've been bullish on gold for 3-4 years, but have an average price of $500 an ounce? How'd you manage that? Gold hasn't been below $700 for the last 5 years.
a "really nice suit" for 200??!!??! ROTFL.
You have no idea what a nice suit is if you think you can get one for $200. $200 buys you a piece of shit suit. A "really nice" suit is $4000 and up.
Milk ain't $2 either
MB he works on a dairy farm that doubles as a tannery? http://www.unitedmask.com/Costumes/images/cow_comical.JPG
An ounce of gold will get you a "pretty nice" suit, just as it did in 1910.
Skim $1.79 St. Paul MN.
A suit nice by most men's judgement $800-$1,200
you just got hosed.
Do your homework dude, gold and stocks rock in deflation not inflation.
Don't know where you live, but the DAILY life essentials(paper goods, foodstuffs) here, are up at least 25-50% over a year ago.
Want a car, truck, house, etc....fine hell of a deal everywhere.
Want to buy a weapon, new close to list $, used, maybe a 15% break.
Just don't think your needs based items have not been JACKED up already to the point of making differnt choices on what you buy,where, and brand quality.
YOU will pay for it..........
Robot, Gold getting crushed today? You dont get it. The paper price if falling, yes, offering you the incredible gift of being able to trade paper for real money! Hope it lasts until my funds arrive next week, but probably wont, some grey or black swan will be shitting on the Feds circus.
Only stupid people buy gold. Slow sluggish growth will continue, & king dollar will always reign supreme..
I Am Harry Wanger & I approved this message...Buy Appl...
You can't eat an ipad.
Yes, you can, but it'll hurt like effin hell as it's rammed down your throat ;)
Not to mention what comes later...
Not without a Blendtec, anyway.
http://www.youtube.com/watch?v=lAl28d6tbko
You can't eat an AAPL either.
Growth in what, exactly? The ranks of those in poverty?
So long as the world is on the oil standard the dollar will continue to reign as oil priced in dollars becomes evermore expensive to extract and thereby squeezes commerce ever tighter.
Going off the $ is synonymous with going "off oil".
Soooo, what happens when oil is no longer sold for dollars but for renminbi?
"Missiles aloft, Beijing in flames; film at 11."
This comment is a parody of a truly stupid person, right?
10-4
No, Harry was supposed to sell AAPL at $310 and buy gold to prevent this correction, but noooo!
well I posted to a comment by Robottrader that doesn't exist now.
But to say what I was going to say anyway.
"Hardly crushed ? hilarious."
How come someone who can post charts be so stupid?. It detracts from many serious and valid points.
US Dollar Will Soar as the Gold Bubble Bursts!
Do I hear a stupid echo in here...
The only echo of stupid you hear you lying fuck is yourself!
The only echo of stupid you hear you lying fuck is yourself!
well, you and I are the same JW so you know.....
Excuse my rudeness Mr.N didn't realize you hit /sarcasm before typing.
I'll be looking forward to you ass clowns poping back in when gold is down after running up another 30% or so.
Good luck with being retarded, its a harsh world out there.
on Thu, 10/21/2010 - 11:48
#667141
I'll be looking forward to you ass clowns poping back in when gold is down after running up another 30% or so.
Good luck with being retarded, its a harsh world out there.
Burnbright,
Money better spent...
http://www.militaryphotos.net/forums/showthread.php?137853-Osprey-Defense-OPS-416-Gas-Piston-Conversion
https://www.topgunfirearmsandtacticalsupply.com/gas-piston-conversion-c-26.html
How about we make a deal, just as in JohnnyBravo's case?
Gold hits a new high, and you leave ZH.
on Thu, 10/21/2010 - 12:49
#667456
How about we make a deal, just as in JohnnyBravo's case?
Gold hits a new high, and you leave ZH.
espirit,
To be clear... a person who posts sourced and sited numerical facts... and who has pointed out clearly a 20% spread... should not post sourced and sited numerical facts... becuase you can NOT! come up with a logical arguement?
Becuase you are stupid... you want everyone else to be stupid as well? _______ Loves Company?
How about, you... come up with some sourced and sited facts and explain to me how I have posted something that is un-ture... or in some way designed to hurt people... like leave them ignorant of important facts...
how about your take your one line drivel and suck it up your ass thru a straw and shit it out your mouth, again?
You mean cheery picks facts, and derives incorrect meaning from facts.
I USE FACTS, SO YOUR STUPID!
Two retards fighting... Go away. At least use spellcheck.
You should be glad I make dumb typos of your rather than you're instead of using l337 speak.
Romeo and Juliet text style.
http://www.albinoblacksheep.com/flash/romjul
I only trust one thing: Cold, hard, .9999 pure fucking gold. I do not trust:
1. government
2. Sales People
3. Women (there are exceptions thank God)
4. Humans in general.
5. Banks.
6. Everything else I didn't mention.
can you fill me in with a little more info concerning the exceptions to #3?
thanks, strider.
I trust my Sprinfield Armory XD45 and Winchester Ranger T 45 ACP 230 gr. +P
I trust my POF P308-14 and Hornady Tap AMAX 168 gr. Precision .308
Paranoid?
Have fun.
S Korea and Japan cannot add to their gold stock pile - they would get an "accident" from the US Military.
Honestly, considering you were nowhere to be found when gold went up and up, do you really think anyone gives a shit about your opinion?
Sadly, Robo is getting rusty and Robo's posts are getting less relavant by the passing day. Too bad Robo, at one time we would have missed your posts, yet this is no longer true.
Robo, click any of the top timelines and post an image of, say, the 1 5 or 10 year chart.
www.kitco.com/gold_currency/charts.htm
Here's a better view
Note the green...
http://img139.imageshack.us/img139/8675/spxgoldratio.gif
Haven't seen much of you since gold went from 1100 -1387. You trolling somewhere else during that time? See you at 1500. Oh wait, that's right, you won't be posting when good is going back up again.
Gold bashing under the moniker of Wackjob on the Clearstation site I'd bet!
If you guys could pull your heads out of your asses for a moment, maybe you would see that the snapshot agrees with your goldbug view...
But then that would mean that you would have to think for yourself and direct your pissed-off insults elesewhere; but we're not quite there yet...
You'd figure they would at least have looked at the graph first....
Would you believe me if I told you otherwise? He was an abashed gold bull when it was trading in low-medium single digits. He has "bullish on gold" track record that goes back to at least 2003.
Gold Expiry Tomorrow bitches !
We have a winner!
FUUUUUUUCK!! I always forget.
Damnit.
Does it start to go up really soon after? What's the timing on this? My son (15) wants some silver (wants his allowance in silver too) and we are trying to time his buy in. I warned him about the possibility of the dip so we are waiting...
and a non-deliver month too, IIRC
And? Whats your point? You have the attention span of a gnat.
on Thu, 10/21/2010 - 11:19
#667032
And? Whats your point? You have the attention span of a gnat.
30 Year Gold Price Historyhttp://goldprice.org/30-year-gold-price-history.html
Ooh, more cherry picked graphs.
on Thu, 10/21/2010 - 12:02
#667208
Ooh, more cherry picked graphs.
EscapeKey,
Looking at the historic highs! is cherry picking? reviewing the facts... is cherry picking? you and every other one liner fucking bought and paid for salesman in hear can eat shit and die... your a fucking tool, a salesman... a used car salesman with the depth of mud puddle.
how about you post a 100 year graph, cherry picking indeed Einstein.
on Thu, 10/21/2010 - 12:50
#667461
how about you post a 100 year graph, cherry picking indeed Einstein.
Burnbright,
http://goldprice.org/bob/uploaded_images/Untitled-2-718477.jpg
Now whats your point? that the price is near all time highs and has clearly balloned?
Don't let your feelings... don't let your pussy hurting... get in the way of the numerical facts you fucking liar.
Can you graph that as a ratio to money supply or relative to a basket of goods? Price alone in inflated FRNs is meaningless when viewed in a vacuum.
The chart you posted fails to show the rise from $700 to $1330, almost a double. A more meaningful chart would show the price of gold from where the U.S. went off the gold standard to the present.
How about a flip comparison of the FRN?
Actually, the FRN went down in value.