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Guest Post: How High Will Gold Go in 2011?

Tyler Durden's picture





 

Since CNBC has been issuing a non-stop barrage of its own version of reality vis-a-vis gold and other precious metals, it may be time for some counterpoint. For all those who believe that the drop in gold from levels which were virtually all time highs on Monday, is the equivalent of the apocalypse, we urge that you sell: volatility will be a key part of the game, and it may be prudent for timid elements to run into the levered safety of 5x beta stocks, trading at 100x forward P/E multiples, which are guaranteed to never go down. It will also likely shake out the weak hands, and certainly provide some cheaper entry points (something which we are confident Cramer's endless prattling on gold will do on its own sooner or later). That said, here are some amusing observations by Jeff Clark of Casey Research on how high gold could go in 2011. Keep in mind that just as all the program content on CNBC, this is nothing but pure abject speculation. In a world of central planning, none can predict the future with any does of certainty.

By Jeff Clark, Casey Research

How High Will Gold Go in 2011?

After stellar years for both gold and silver, what prices will
precious metals hit in 2011? Here's an analysis based strictly on their
price behavior in the current bull market.

First, take a look at the annual percentage gains that gold has registered since 2001 (based on London PM Fix closings):

Excluding 2001, the average gain is 20.4%. Tossing out the additional weak years of '04 and '08, the average advance is 24.8%.

So we can make some projections based on what it's done over the
past 10 years. From the 12-31-10 closing price of $1,421.60, if gold
matched…

  • The average rise this decade, the price would hit $1,711.60
  • The average rise excluding the three weak years = $1,774.15
  • Last year's gain = $1,858.03
  • The largest advance to date (2007) = $1,875.09

But what if global economic circumstances continue to deteriorate? What
if worldwide price inflation kicks in? And what if government efforts
at currency debasement get more abusive? If Doug Casey is right, a
mania in all things gold lies ahead – what if that begins in 2011?
Here's what price levels could be reached based on the following
percentage gains.

  • 35% = $1,919.16
  • 40% = $1,990.24
  • 45% = $2,061.32
  • 50% = $2,132.40
  • 1979's gain of 125.7% = $3,208.55

It thus seems reasonable to expect gold to surpass $1,800 this year, as
well as reach a potentially higher level since the factors pushing on
the price could become more pronounced.

Here's a look at silver. 

 

As you can see, silver had its biggest advance in 2010. The average
of the decade, again excluding 2001, was 27.5%. And also tossing out
the '08 decline, the average gain is 34.3%. So, from the 12-31-10
closing price of $30.91, if silver matched...

  • The average rise this decade, the price would hit $39.41
  • The average gain excluding 2008 = $41.51
  • Last year's advance = $56.22
  • The 1979 gain of 267.5% = $113.59

So, $50 silver seems perfectly attainable this year. And that's without monetary conditions worsening.

It's titillating to ponder these advances for gold and silver,
especially when you consider we might be getting close to the mania.
And if we are, that should do wonderful things to our gold and silver
stocks, too.

I would add one caution: the odds are high that there will be a
significant correction before gold begins its march to these price
levels. In every year but two ('02 and '06), gold fell below its
prior-year close before heading higher. And here's something to watch
for: in every year but one ('08), those lows occurred by May.

In other words, a buying opportunity may be dead ahead. And if you buy
on the next correction, your gains on the year could be higher than the
annual advance.

 


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Wed, 01/05/2011 - 18:40 | Link to Comment Freddie
Freddie's picture

Where is Blythe and The JP Morgue?  My silver is going down with my gold.  Should I "buy the fucking dip?"

Wed, 01/05/2011 - 19:03 | Link to Comment Turd Ferguson
Turd Ferguson's picture

Yes.

Wed, 01/05/2011 - 19:26 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Can you understand ? 

Sell 5% of your gold and buy SPRD,ARM,MIPS,NVDA( nice charts ). You will be happy mon'

 

http://www.youtube.com/watch?v=UIEeEmm3bSA

Wed, 01/05/2011 - 20:01 | Link to Comment hambone
hambone's picture

Funny, reading a trite article in MW and they had a chart of Dow from 1980 through today showing we were back at 2000 peak.  It also happens to be the exact formation of a massive head and shoulders pattern (seriously, look it up in investopedia or whatever...it is like we are nonchanalantly living w/ Mt. Vesuvius in our backyard.

http://www.marketwatch.com/story/us-stocks-hit-oil-slick-as-resource-stocks-fall-2011-01-05?dist=afterbell

Look at it, stare at it.  Check the downward sloping neckline.  So fricking obvious.  The tidal wave is more than the Bernank can overcome.

Wed, 01/05/2011 - 20:10 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

I'm not trading S&P. Look at the return on those stocks in the last year & look into the exploding market they service. 

Look at the monster head and shoulders on a ten year gold chart. When gold hits 1,200 I will buy a few miners ...

 

... "Nvidia announced that it is indeed working on a CPU and that the chip is based on the ARM RISC architecture that's wickedly popular in smartphones and tablets. In other words, it's not a low-powered x64 chip.".....

Wed, 01/05/2011 - 20:46 | Link to Comment hambone
hambone's picture

You were a lot funnier when we wondered if you'd pick your nose and eat it!

Buy what you want but just make sure you have what you really need just in case things don't turn out well (ie, food, water, shelter, friends).  And no, if things go poorly, gold will likely only be of limited use as well.

I think what I'm saying is theres a high likelihood the game will be changed...all new rules, sorta like changing from Monopoly to Risk and your monopoly money won't mean anything in the new game.  Seems we're all trying to figure out what that transferable currency will be so we can make the jump.  Could be stocks, bonds, gold, guns and ammo, who knows.  Good luck to all of us.

Wed, 01/05/2011 - 20:51 | Link to Comment Hephasteus
Hephasteus's picture

Oh noes. Nvidia is fucked. You want to know why they are fucked. Because they have to pulled out the magic Acorn of antioc. ACORN@tm

Industry Computer hardware Fate Bought by Morgan Stanley Founded December, 1978 Founder(s) Hermann Hauser
Chris Curry Defunct November, 2000
Wed, 01/05/2011 - 22:36 | Link to Comment barkingbill
barkingbill's picture

there is no head and shoulders on a ten year gold chart. lol. who are you kidding? it is just going right on up...but hey if semiconductors is your thing...

Wed, 01/05/2011 - 23:57 | Link to Comment Hephasteus
Hephasteus's picture

There's a cup and a head and shoulders and a rorshak test in there. This brilliant wall street guy told me so.

Thu, 01/06/2011 - 03:42 | Link to Comment A Nanny Moose
A Nanny Moose's picture

this Wall St. guy, didn't by chance have an alter-ego named Underdog, did he?

Thu, 01/06/2011 - 02:13 | Link to Comment akak
akak's picture

there is no head and shoulders on a ten year gold chart.

I think Balding_Snails got confused while reminiscing about having rubbed shoulders with Bernanke while dissing gold, and having then given him head.

Thu, 01/06/2011 - 12:04 | Link to Comment Arius
Arius's picture

save your money for FACEBOOK...GS is in need of suckers...

Wed, 01/05/2011 - 21:00 | Link to Comment 99er
Wed, 01/05/2011 - 21:00 | Link to Comment Dr. Sandi
Dr. Sandi's picture

Turdster...

You are a god. And having your blog

http://www.tfmetalsreport.blogspot.com/

available when my silver is getting tarnished makes the day a little easier to face.

My biggest problem right now is that the dip is here and I have no liquid assets to pour into silver. They're already there.

And the millionaire who owes me the paper stuff that would allow me to buy another hundred pounds or so of the silver is suddenly broke.

So I'm going to do a Brian Wilson and just go back to bed for a week or so.

Thu, 01/06/2011 - 00:56 | Link to Comment Turd Ferguson
Turd Ferguson's picture

Thanks, doc.

Thu, 01/06/2011 - 01:47 | Link to Comment ZakuKommander
ZakuKommander's picture

Take 2 aspirin and call me in the morning.

Wed, 01/05/2011 - 19:03 | Link to Comment Janice
Janice's picture

Yes, just buy the fucking dip.

Wed, 01/05/2011 - 19:45 | Link to Comment bigdumbnugly
bigdumbnugly's picture

all i read here is to buy the f'ing dip.   so i do.  in fact, i've been doing just that for so long that i am getting into hot water around the house here.

she says its spoiling and that we'll never eat that many chips to use it all up.  and that we never go to the movies anymore because my money's tied up in dip.

yeah, thanks a lot all for the tip...

p.s.  party at my house.  byo beer and chips.  i got the rest.

Wed, 01/05/2011 - 20:53 | Link to Comment Dr. Sandi
Dr. Sandi's picture

Switch to the Frito-Lay stuff. It has enough preservatives to keep you dippin' until plastic is considered a precious metal.

Wed, 01/05/2011 - 22:24 | Link to Comment bigdumbnugly
bigdumbnugly's picture

thanks, doc.  wait til she hears that!  lol.

Wed, 01/05/2011 - 20:56 | Link to Comment Jace0228
Jace0228's picture

+1

Wed, 01/05/2011 - 19:13 | Link to Comment Crisismode
Crisismode's picture

No, No, NO!

You have it COMPLETELY wrong!

You must Fuck the Buying Dip!

There, fixed it for you.

Wed, 01/05/2011 - 19:35 | Link to Comment pamriallc
pamriallc's picture

Hedge-Fund Man Finds Inner Lion in Outer Space: Michael Lewis

 

 

To: The Loyal Investors of The Fund

From: The Manager

 

Like a lot of hedge-fund guys, I’ve recently endured what might be misconstrued as a nervous breakdown.

 

Before CNBC or the New York Times or some other rag grabs the story and distorts it, I want to tell you about it myself -- and explain not only my disappointing returns but also my prolonged absence. Just so you get it straight.

 

Anyone who runs several billion dollars of other people’s money, and one hundred million of his own, is likely to having moments of self-doubt. I don’t recall experiencing any myself, but I concede that others have.

 

My personal crisis was different: a single moment, earlier this year, when I doubted not myself, but the world we inhabit. If I was a different kind of guy or (God forbid) a chick, I might easily have gone all “Eat Pray Love” on you.  Had I succumbed to the feelings of that moment I might have vanished in a puff like Andrew Lahde to devote my remaining days on Earth to the smoking of what is no doubt some very fine weed, or run off like Stanley Druckenmiller to feed the poor and cure some lepers. Like Guy Hands, I could have gone into hiding on a Channel Island; or, like dozens of hedge-fund guys in the past year, I could have just folded, without offering you any explanation.

 

My crisis struck one morning early this year, as I stared at my Bloomberg screens. Nothing had happened and that was the scary thing. For no reason in particular I was overcome by this eerie conviction that markets would never again be free. They’d become traps, run by politicians and bureaucrats, designed to ensnare the superior man.

 

Jungle Law

 

What had happened, in a word, was socialism.

 

The law of the jungle, suspended since the fall of 2008, had been permanently revoked. Park rangers would forever more feed and protect all the animals, even the fat slow ones that deserved to die. In this new environment the apex predator --the lion with the gift for spotting the wounded antelope -- was doomed. My sixth sense for the kill was now irrelevant.

It goes without saying that, to a lion, feelings of doom are especially painful. To my credit, I resisted hiring a shrink, or rethinking my priorities, or searching for any more meaning in my life. Instead, I shot you that note, reminding you that all of you have the same two-year lock-up, then I cut a check to the Russian government for a seat on its new Soyuz TMA- 19 rocket.

 

Russian Shorting

 

For those of you who have never had the experience, getting launched into outer space by the Russians sounds weirder and more offbeat than it actually is.

 

It’s not expensive -- at least not in the context of my net worth -- or even complicated, unless they find out you’ve been shorting Russian stocks. Mainly, you show up wherever some Russian tells you to, and refrain from making unreasonable demands, or offering them too many of your own ideas how to improve their operation.

 

Anyway, orbit turned out to be the perfect place for a hedge-fund manager to reconsider his place in the universe.

Floating around the capsule providing financial advice to my fellow astronauts and getting to know some of the ladies on board, the disturbing turn of events back on Earth came into sharper focus.

 

Your constant demands that I explain my strategy to you; the systematic extermination of some truly badass hedge-fund guys; the rumors that Goldman Sachs might shut its prop-trading desk rather than simply evade the new laws; the drumbeat that Wall Street is no longer a land of opportunity; Craigslist shutting down its sex ads -- all news points in the same direction: big-time returns for me in the future.

 

Rising Lion Prices

 

The price of being a lion is rising; the weaker lions are slinking away from the jungle. The stronger lion, the lion who survives, will have the jungle to himself. Inside the space capsule I had an epiphany: I am that lion.

 

Clawing my way along the wall to the capsule’s latrine, I passed a window. For the first time I really looked at the planet we live on -- the planet on which I still think I can generate returns in excess of 18 percent per annum.

 

In that moment I realized how small it is. No bigger than my wallet, when I held it up to the window. A lot of people, including some of you, have described me as “larger than life,” but no one has ever called me “larger than Earth.” Yet in comparison, from that distance, I was huge.

 

Then it struck me: so long as I keep my distance from my planet, I will be able to keep myself in the proper perspective. So long as I remain able to visualize my relative size, it doesn’t matter if others seek to shrink me.

 

The socialists thought they could force me to violate my own nature. I’d found the way to stay true to myself.

 

Take Me Back

 

Thus reassured, I told the guys up front to cut the engines and get us back down on the ground, preferably somewhere near midtown Manhattan. I was itching to trade; poised for a few quick kills.

 

Alas, it took the better part of three months and some serious change to persuade the Russian government to ferry me back earlier than planned. When you are in space it’s sometimes hard to explain the value of your time. But in retrospect this was a lucky break, as it gave me the leisure to begin my memoir of the financial crisis, “Outer Space, Inner Lion.”

Rumor has it that those of you who have given up on me assume you have heard the last of me.

 

Trust me:  You haven’t.

Wed, 01/05/2011 - 20:29 | Link to Comment CrazyCooter
CrazyCooter's picture

Having fun here ...

Assuming you are serious, its funny someone who clearly has a math background needs hookers in space to realize they are statistically insignificant in the universe.

Me and my imagination nailed that as a teen.

Hope you future has room for non-producers!

Cooter

Wed, 01/05/2011 - 20:31 | Link to Comment gmrpeabody
gmrpeabody's picture

And so..., your point is?

Thu, 01/06/2011 - 01:26 | Link to Comment Bananamerican
Bananamerican's picture

in the capsule, the peaceful capsule, the douchebag sleeps tonight.....

Wed, 01/05/2011 - 23:21 | Link to Comment thegr8whorebabylon
thegr8whorebabylon's picture

Thank you Michael Lewis.  The Big Short was one of the better reads of my life.  Still at it I see, pesky lion.  BTW, Mike Burry's gold and farmland, and prolly here with us right now.  :)))

Wed, 01/05/2011 - 21:28 | Link to Comment jmw_hobbes
jmw_hobbes's picture

As crazy as it sounds, I in fact nibbled the dip today and added 250 shares to my pot of PSLV.  Perhaps more correction to come and I will be foolish again and re-buy...

Wed, 01/05/2011 - 18:40 | Link to Comment tao400
tao400's picture

That's what I am hoping to do. sold a bunch of gdxj, gdx, sil, slv. Waiting for them to go down below where i sold them. it is close now.

Wed, 01/05/2011 - 18:44 | Link to Comment Flapjackmaka
Flapjackmaka's picture

It's at the top the bubble will pop

-HarryRoboWankersheeple

Wed, 01/05/2011 - 19:45 | Link to Comment Monkey Craig
Monkey Craig's picture

be wary of the shill "HamyWanger" too...note the spelling

Wed, 01/05/2011 - 18:45 | Link to Comment Thomas
Thomas's picture

I'm tearing up while I type.

Wed, 01/05/2011 - 23:22 | Link to Comment thegr8whorebabylon
thegr8whorebabylon's picture

hey Thomas, your year in review was something else, thanks!

Wed, 01/05/2011 - 18:45 | Link to Comment tmosley
tmosley's picture

Waiting for May is a danger game.  Play it only if you are satisfied with the PMs you have in hand right now.

Selling at this juncture is madness.  I do agree with the sentiment that the callow whiners should get out immediately. 

Wed, 01/05/2011 - 19:17 | Link to Comment famousamos
famousamos's picture

Concur on the danger of waiting for May, especially for Silver. I bought a couple more ASE rolls at 10am - classic morning takedown. Little here and there and the wife won't notice :)

Another factor here is the 60 day delay in position limits. A lot of people think this will impact JPM short position. I think they'll probably get a waiver and the long positions will be scrutinized instead (bastards). If not, we could see a huge silver spike in as little as two months (IMO). I'm keeping cash on the sidelines for a really good buying opportunity. If it never happens, I'm fine keeping the cash. I think silver will move before May due to position limits and QE3 talk, so the Silver takedown should be Jan/Feb.

Wed, 01/05/2011 - 20:43 | Link to Comment CrazyCooter
CrazyCooter's picture

I had the same thoughts regarding position limits. I am not sure its realistic to expect fairness at this point in the game.

Cooter

Wed, 01/05/2011 - 18:48 | Link to Comment ShankyS
ShankyS's picture

May get a bit of extended pullback here IMO, but does it really matter? If you can find it, buy it. This is not the time to get greedy on price.1 to 2% here won't be significant where gold is headed.

Wed, 01/05/2011 - 18:53 | Link to Comment TheGreatPonzi
TheGreatPonzi's picture

Gold and silver performed poorly in late 2008 because of deleveraging and deflation fears. At the time, governments and central banks had not shown their teeth. Now that it is obvious for everyone that deflation is definitely ruled out - except for a few idiots -, I can see no barrage for gold prices.

I remember having seen in early 2009 and early 2010 the old good arguments for gold (money printing, bailouts, dollar depreciation) on forums and blogs, refuted by the old good anti-gold people ("gold is in a bubble", " I predict the exact opposite", "gold bugs will be surprised by the violence of the crush", "deflation is the only plausible thing", etc.)

If we take the final toll, gold won, paper bugs lost.

How much in 2011? Except if every governmental and central bank support measure is brutally stopped and withdrawned (i.e. a deflationist fool's dream), a minimal 20% increase will happen.

Wed, 01/05/2011 - 19:07 | Link to Comment txapela
txapela's picture

thank you for that.

 

any idiot that sells a PM while the Fed is staying that they're going to complete QE2 and there are good chances of continuing into QE3 should be sent to the gallows.

 

PMs are down because of direct market manipulation. The modus operandi of the crooker bankers is simple. They withhold all bids to buy as they tell would be purchasers to hold off as they will get their metal cheaper. Then they bombard with over 100,000 contracts that are totally un-backed and they trip some of the longs who have stop losses below the spot price. this trips other stop losses as the price goes lower until it reashes its nadir and the bankers slowly try to cover all their shorts. this is collusion, as all the bankers are told in advance when the raid is to be expected. Then they supple paper with no backing to gold or silver whatsoever. And our regulators just stand there and do absolutely nothing with this blatant manipulation.

 

So I must ask these question:

Are the same fundamentals which sent the price of PMs soaring still in place? Yes.

Need anything else to know that it'll keep going up? No.

Why? Because the fundamentals always beat the technicals in the long term. Always.

 

Also, don't buy any derivative (paper) based ETFs for your PM exposure. Don't be fucking stupid. The Over The Counter (OTC) Derivative Market is at $400/$600 trillion (forget the actual number, but really, who gives a fuck when it's that big of a number?)

Either hold physical metals in your house, or hold stock in a fund that isn't owned/operated/held by a bank. Fucking end of story. You've been warned, and as we say in spanish: people don't die after being warned of war. Meaning: duck and cover.

Wed, 01/05/2011 - 19:23 | Link to Comment Crisismode
Crisismode's picture

Are you Harvey Organ?

If not, your 2nd Paragraph (PMs are down . . .) is a direct plagiarism from his website posting yesterday.

Which is it?

Wed, 01/05/2011 - 22:29 | Link to Comment bigdumbnugly
bigdumbnugly's picture

not sure,  tx didn't talk about smoke coming out of the comex windows or say anything about them staying up all night burning the midnight oil and scheming their next move.

but the rest was pure harvey.

Wed, 01/05/2011 - 19:25 | Link to Comment Yardfarmer
Yardfarmer's picture

you outta give the proper attribution to Mr. Harvey Organ

Wed, 01/05/2011 - 20:46 | Link to Comment CrazyCooter
CrazyCooter's picture

Please attrib to harvey's post, a chunk of your post was his content.

Cooter

Wed, 01/05/2011 - 22:29 | Link to Comment chubbar
chubbar's picture

 Is this DavidPierre?

Wed, 01/05/2011 - 20:40 | Link to Comment Sokhmate
Sokhmate's picture

I'm curious, can you name one of those few deflation idiots? (serious question)

Wed, 01/05/2011 - 20:47 | Link to Comment CrazyCooter
CrazyCooter's picture

Mish (Mike Shedlock)?

Cooter

Wed, 01/05/2011 - 20:49 | Link to Comment CrazyCooter
CrazyCooter's picture

Mish (Mike Shedlock)?

Cooter

Wed, 01/05/2011 - 21:03 | Link to Comment TheGreatPonzi
TheGreatPonzi's picture

Every deflationist out there, famous or not. Deflation could happen if:

1) Deflation would not mean the immediate death of everything (as deflation is lethal for a Ponzi scheme)

2) There was some form of standard preventing governments and central banks from printing

3) Governments were not risking default

4) Governments and banks were honest.

Wed, 01/05/2011 - 18:49 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

My one concern for Gold is that the ECB may decide to implode Ireland's deposit base once all of its client bond holders are made whole.

If they make clear that Ireland was a one off and deserves its faith given its recklessness blah blah blah it may confer value to the remaing deposits in the euro zone.

This would be formidable nuclear weopan in the CBs arsenal.

 

Wed, 01/05/2011 - 18:57 | Link to Comment Bastiat
Bastiat's picture

Try graphing the last 10 years or so of gold on a logarithmic scale.  Projecting from a linear regression (on that scale) for the whole series, I get around $1,650.  However, fitting to the last 4 years I get around $1,750.  FWIW.

Wed, 01/05/2011 - 19:00 | Link to Comment SWRichmond
SWRichmond's picture

It's not 1979, it's more like 1976, or maybe even 1974.  Some of you guys really don't understand what is happening here, do you?

Wed, 01/05/2011 - 19:43 | Link to Comment The 22nd Prime
The 22nd Prime's picture

I concur. We ain't seen nuttin' yet.

Consider days like yesterday and today a gift. Buy the fucking guacamole.

Wed, 01/05/2011 - 20:38 | Link to Comment gmrpeabody
gmrpeabody's picture

+100

+++++

Wed, 01/05/2011 - 20:51 | Link to Comment CrazyCooter
CrazyCooter's picture

Mmmmm, guacamole.

Cooter

Thu, 01/06/2011 - 00:11 | Link to Comment Marley
Marley's picture

Agreed, cept with an apathetic youth stuck in "Family Ties" land.

Wed, 01/05/2011 - 19:02 | Link to Comment deepsouthdoug
deepsouthdoug's picture

We've already seen the high for the year. 

Wed, 01/05/2011 - 19:04 | Link to Comment Turd Ferguson
Turd Ferguson's picture

No we haven't.

Gold has an average annual return of about 25% since 2001. None of the fundos have changed. $1400 + 25% = $1750 sometime in 2011.

Wed, 01/05/2011 - 19:49 | Link to Comment The 22nd Prime
The 22nd Prime's picture

Listen to the Turd, Bitchez.

BTW, I enjoy your site and insight. Thanks.

Wed, 01/05/2011 - 19:59 | Link to Comment SWRichmond
SWRichmond's picture

We haven't seen the first real sovereign debt crisis yet.  They've all been postponed.  But, merely so.  Postponed, that is.  The next wave of mortgage resets is just starting, and these are the option-arm's and alt-a's.  Fun stuff, really fun stuff.  Ben will be buying more MBS's, and where's he gonna get the money?

http://www.calculatedriskblog.com/2007/10/imf-mortgage-reset-chart.html

From the 60 minutes interview:

Bernanke: It doesn’t seem likely that we’ll have a double dip recession. And that’s because, among other things, some of the most cyclical parts of the economy, like housing, for example, are already very weak. And they can’t get much weaker [emphasis added]. And so another decline is relatively unlikely.


Wed, 01/05/2011 - 21:50 | Link to Comment DoctoRx
DoctoRx's picture

BB poll 12/24 of over 100 traders/analysts etc.  Median price prediction for Au for 2011 was $1700 and for Ag it was $40 - disconcerting though of course not dispositive.  Previously TPTB (or, TPTwere) always predicted down years for the metals.  It might be a bit naive to think that pricing of PMs has not already incorporated the reality of all the liquidity Gentle Ben has created and can be expected to create. 

Gold is more costly than it has ever been (in fiatsco terms) except for a few days over the past less than 3 months.  Just sayin.

Meanwhile of course the fundos are unchanged.  By definition.  That's why gold is golden.  But are politicians and Benny and the Jets any more feckless this month than we already knew they were?

The investor in me holds gold durably.  The trader in me doesn't want to fight rapidly rising interest rates with sentiment bullish.

Wed, 01/05/2011 - 19:53 | Link to Comment Yardfarmer
Yardfarmer's picture

methinks you have been high for a year (or more)   btw, Turd you might double that for '11

Wed, 01/05/2011 - 19:03 | Link to Comment Strider52
Strider52's picture

I was in Ireland when the big crash happened. In the pubs the TV's had 1 of 2 things: Football, or BBC news on the crash. Inbetweenst pints of Guiness, I planned that when I got back home to the states, I was going to buy gold. I found a coin dealer that got me started, and I bought at $720. (Last year I went big on silver, cuz I read ZH).

 Since then, I have been waiting patiently for my "double-up". Every time it gets above $1420, it crashes. Dang, this is a bitch. But I sincerely envision my goal of $1440 to happen within a month.

Wed, 01/05/2011 - 21:43 | Link to Comment lsbumblebee
lsbumblebee's picture

Staring at the price of gold is like staring at Cynthia Myers' tits. It will drive you crazy.

Thu, 01/06/2011 - 00:22 | Link to Comment Marley
Marley's picture

So, 39 DD for gold this year?

Thu, 01/06/2011 - 00:40 | Link to Comment The Third Man
The Third Man's picture

Man, you go way back! 

Wed, 01/05/2011 - 19:05 | Link to Comment pitz
pitz's picture

Senior miners are a far better deal than physical these days.  Physical prices are absolutely and utterly ridiculous relative to the senior minors.

Bring up the ABX chart versus the GLD ETF.  ABX should be outperforming by 2:1, instead, its underperformed by 2:1.  ABX should be 4X its current level just based on the leverage this company has to gold on its balance sheet. 

Wed, 01/05/2011 - 19:14 | Link to Comment Woppopotamus
Woppopotamus's picture

 So will Barrick hit 200 this year then?

Wed, 01/05/2011 - 19:26 | Link to Comment pitz
pitz's picture

Probably not....  but the price of gold is *way* ahead of the prices of the senior mining stocks.  Which is pretty good evidence that 'big' money hasn't even entered the sector.  Juniors are just being bid up by retail, for the most part.

Wed, 01/05/2011 - 19:32 | Link to Comment Woppopotamus
Woppopotamus's picture

And to you the 'big' money is who exactly?

Wed, 01/05/2011 - 19:51 | Link to Comment Crisismode
Crisismode's picture

In your dreams.

Miners are subject to the very same market manipulation that the rest of the shit is.

 

Wed, 01/05/2011 - 20:00 | Link to Comment pitz
pitz's picture

And GLD isn't?  Why are people willing to pay almost 'full' price for that GLD dogshit, but barely anything for ABX? 

 

 

Wed, 01/05/2011 - 20:41 | Link to Comment gmrpeabody
gmrpeabody's picture

Because anyone putting big money into GLD doesn't REALLY understand a damn thing!

Wed, 01/05/2011 - 22:48 | Link to Comment chubbar
chubbar's picture

ABX? That's your fucking pick?

Check the BOD list, isn't there a 'bush' in there?

Weren't they named in the Blanchard lawsuit? Which by the way was settled out of court by in a mandated settlement, much to the dismay of Blanchard.

This company is the epitome of a bad  mining company.

They have hedged much of the gold from their disputed find in south america and will lose billions on that as well as their gold shorts, which they recently have just started covering. '

This company is the worst of the worst and anyone investing in this dog deserves what is coming.

Do some due diligence and stay away from this dog!!!!

Thu, 01/06/2011 - 01:38 | Link to Comment pitz
pitz's picture

What's wrong with ABX?  They did that equity issue and settled the hedges out a few hundred dollars in the gold price ago.  Do they have problems on the production side?  Haven't heard of any.  And disputed gold mine or not, they're cranking out insanely high earnings now. 

Quite unlike most of the juniors who won't even pull an ounce of gold out of the ground by the time this is over. 

The fear of ABX, IMHO, is quite irrational.  Its almost like traders don't want to have anything to do with ABX because they remember "ABX" meaning a subprime mortgage index, and not the stock, Barrick Gold. 

Thu, 01/06/2011 - 02:41 | Link to Comment delacroix
delacroix's picture

they,re still sitting on a pile of shorts, they will have to cover. they launder more money, than they make mining JMHO. shareholders are just suckers

Wed, 01/05/2011 - 19:09 | Link to Comment Jstanley011
Jstanley011's picture

"...and it may be prudent for timid elements to run into the levered safety of 5x beta stocks, trading at 100x forward P/E multiples, which are guaranteed to never go down..." rofl

Wed, 01/05/2011 - 19:11 | Link to Comment Kina
Kina's picture

CNBC and the other shills of nonsense trying their best to detroy confidence in gold tells you one thing - they are all shit scared of gold and know its on the up and up.

 

Its when they start telling you gold is THE investment to get into that I will worry. 

Wed, 01/05/2011 - 20:14 | Link to Comment SRV - ES339
SRV - ES339's picture

CNBC headline earlier today (read with a straight face).

"Gold meltdown continues... spot price down 0.10% for the day"

You can't make this stuff up!

Wed, 01/05/2011 - 19:16 | Link to Comment Dr_Dazed
Dr_Dazed's picture

Sure; linear extrapolation is the way to go.  Think I'll buy some APPL & NFLX.

Wed, 01/05/2011 - 19:30 | Link to Comment Yardfarmer
Yardfarmer's picture

outta stick with the Au/Ag juniors such as Couer d'Alene (CDE) up $15.85 since August

Wed, 01/05/2011 - 19:39 | Link to Comment Woppopotamus
Woppopotamus's picture

CDE is roundly rejected over at nadler's house due to nationalization concerns.

Wed, 01/05/2011 - 19:55 | Link to Comment Crisismode
Crisismode's picture

Anyone who listens to one single word of Nadless has a screw loose.

Unlike Nadless, whose entire construction is a can of loose screws . . . shaken loudly like an aggressive panhandler, to no avail.

 

Wed, 01/05/2011 - 20:00 | Link to Comment Woppopotamus
Woppopotamus's picture

well its a good thing i'm referring to the kitco forum users rather than Nadless. I wonder if nadless will live longer being a unich?

Wed, 01/05/2011 - 20:10 | Link to Comment akak
akak's picture

I like that!

Jon Nadler: Intellectual Eunuch.

Wed, 01/05/2011 - 19:56 | Link to Comment Yardfarmer
Yardfarmer's picture

thanks Woppo, nationalization and taxation are obvious concerns at all the miners

Wed, 01/05/2011 - 20:03 | Link to Comment Woppopotamus
Woppopotamus's picture

but of equal concern?

Thu, 01/06/2011 - 05:41 | Link to Comment fredquimby
fredquimby's picture

I got HL (Hecla Mining) at $3.22 about 18 months ago.....it was 10.something yesterday.

They are unhedged and produce both silver and gold in Idaho in the sameish region as CDE.

Cheers!

Wed, 01/05/2011 - 19:20 | Link to Comment Peter the...
Peter the...'s picture

My question is have the PM ETFs caused a permanent devaluing of blue chip gold stocks.  They should be higher.

Wed, 01/05/2011 - 19:30 | Link to Comment Clint Liquor
Clint Liquor's picture

Certainly, many paper Gold investors left the Miners for the ETF's. But, the real reason the Miners suck is because they don't make any money. When (if) they ever start showing some real profits and 'gasp' maybe actually pay a real dividend, their share prices will reflect it.

Wed, 01/05/2011 - 19:31 | Link to Comment pitz
pitz's picture

Permanent, no.   Temporary, yes.  Keeping the 'masses' out of gold stocks is better for investors in the long run.  At some point, they will explode higher.  Just look at, for instance, ABX, trades at <7X cashflow, 10X earnings.  Plenty of senior gold miners like that as well, with no exploration risk.  Sure beats NFLX, GOOG, or Facebook at 100X P/E's. 

Wed, 01/05/2011 - 20:06 | Link to Comment Flakmeister
Flakmeister's picture

  I think that you are being a tad optimistic on Barricks numbers, I have their TTM EPS at 2.90, next quarter should bump it to 3.40 or so, giving a TTM PE of 14.7. Looking forward, I don't see much more than 4.00 for FY 2011, unless there is something I overlooked...

Wed, 01/05/2011 - 19:39 | Link to Comment Flakmeister
Flakmeister's picture

  That is a good observation, it may well be the case. The miners were always the most liquid form of gold exposure before GLD. Watch the earnings, that will be the tell....looking at ABX, they have not gotten a pop, mind you, latest numbers are for 9/10 so there should be a 20% upside to the next quarter earnings. Assuming no multiple compression, it suggests that ABX should trade at 62....YMMV

Wed, 01/05/2011 - 22:11 | Link to Comment DoctoRx
DoctoRx's picture

I am long ABX Feb 60 calls.  Just for fun.  But ABX is my favorite stock.  Agree w Pitz.  ABX/GG better risk-reward here than bullion.  NEM however acts badly.

Wed, 01/05/2011 - 19:24 | Link to Comment asotavb
asotavb's picture

the faster gold drops on the paper markets the faster we will see freegold.

Wed, 01/05/2011 - 19:47 | Link to Comment Woppopotamus
Woppopotamus's picture

expand on that thought please. Is it impossible for a large takedown in which physical is still available?

Wed, 01/05/2011 - 20:00 | Link to Comment Yardfarmer
Yardfarmer's picture

Woppo,my experience- it pays to have a local source. befriend your local gold and silver exchange. quick, no shipping, convenient and they know the local cache

Wed, 01/05/2011 - 20:07 | Link to Comment Woppopotamus
Woppopotamus's picture

I've dabbled with several online dealers myself and the delay is somewhat annoying I agree. But making a phone call is nice for buying the dips. I should find a coin shop though to broker relations.

Wed, 01/05/2011 - 21:41 | Link to Comment UncleFester
UncleFester's picture

It's your interaction with others that really matters.  Focusing on price, one often forgets.  Buying online is so...I don't know, institutional and impersonal.  I'm willing to pay 3-4% above spot to look a man in the eye and say "I can't hold these green pieces of shit any longer, please take them."

I Fester

Thu, 01/06/2011 - 01:12 | Link to Comment blunderdog
blunderdog's picture

I might be interested in buying online if I weren't so damn paranoid.

If the guy on the other side of the bulletproof window is going to take my linen and not return me my metal, at least I know what that fucker looks like.

Wed, 01/05/2011 - 19:27 | Link to Comment Wheatman
Wheatman's picture

If Europe implodes because of austerity, it could bring down asia and usa. Moreover there are calls for austerity in the USA at the state level. This deflationary suckout could well cause a temporary mini-crash in everything, including gold, UNTIL the currency (USD) is formally devalued (or abandoned). So gold will advance, but many may be sucked out in the process becuase of the volatilty. Central bankers are morons and behind the curve. So what if they cannot stop the suckout? Gold cannot survive short term in that environment as a lot is owned on leverage. A titatanic deleveraging (probable) will take gold down temporarily. So all the gold bugs should take a shower before the titanic sinks.

Wed, 01/05/2011 - 19:37 | Link to Comment cxl9
cxl9's picture

Government spending in the United States will never decrease. At most you'll see a temporary slight decrease in the rate of acceleration, which will be accompanied by the gnashing of teeth, pulling of hair, and woeful tales of children starving to death in the streets due to "massive cuts". It is all illusion. The states and the Federal government will spend, the Federal Reserve will print, and things will continue like this indefinitely. That is all you need to know.

Wed, 01/05/2011 - 19:29 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

Look at us , all fumbling in the greasy till while the robbers are busy taking the stock - the bankers have us right where they want us - they have turned us into fiat chasing gold bugs.

Wed, 01/05/2011 - 19:34 | Link to Comment Yardfarmer
Yardfarmer's picture

they're waiting there with open arms in that dumpster where yer tossin' yer gold

Wed, 01/05/2011 - 19:36 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

Yardfarmer - I ain't giving it up , but but - there comes a point when a critical mass of insiders want a implosion of all productive activity to justify their postion in Gold - that is the danger of the yellow metal , its power corrupts.

My precious.

Wed, 01/05/2011 - 20:56 | Link to Comment Hephasteus
Hephasteus's picture

No I want in implosion of pdocutive activity because all we are producing is pain and suffering. End the raping now.

Wed, 01/05/2011 - 21:03 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

It helps  that there is no productive activity outside agriculture in the US now - just extractive - same goes for everywhere else really as they feed this consumption machine.

Two sides of the same coin I guess.

Wed, 01/05/2011 - 21:12 | Link to Comment Hephasteus
Hephasteus's picture

Oh I wish. There are millions of assholes out there up to NO GOOD.

Thu, 01/06/2011 - 00:08 | Link to Comment MrSteve
MrSteve's picture

a genius statement of the previously unspoken, now obvious truth. Great post. We should just keep buying PM and ignore the "news", all Orwellian newspeak at best. Dialing out FRNs with bullion in hand is the only way forward. History teaches that lesson.

Wed, 01/05/2011 - 19:34 | Link to Comment JonNadler
JonNadler's picture

I agree with the robot on this one, it's going to 250, of course it's not unusual that we agree since we're the same person

Wed, 01/05/2011 - 20:30 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Atta boy Jon, you tell those tin hatted Goldbugs to listen to your "expert" advice.

Gold and silver are clearly overvalued, and need to be blowtorched back to more realistic valuations like $250 and $5. 

LMAO. <sarc ON>

Wed, 01/05/2011 - 20:19 | Link to Comment Slewburger
Slewburger's picture

NonJadler,

Did you and RoboTard vote Cramer off the island? According to him this is a buying opportunity, I almost shit myself while watching him tell his viewers to play catch the knife.

Not that I'm calling a top (not by a long stretch) but I really fucking hate that guy.... we shouldn't have the same opinion ....on anything.

 

Wed, 01/05/2011 - 19:40 | Link to Comment david3549tw
david3549tw's picture

http://thehill.com/blogs/on-the-money/personnel-notes/136247-report-volcker-to-step-down-as-top-obama-economic-adviser

Report: Volcker to step down as top Obama economic adviser By Peter Schroeder 01/05/11 05:38 PM ET

The makeover of the Obama administration continues, as top economic adviser and former Federal Reserve Chairman Paul Volcker is planning to leave the White House, according to a report.

Reuters reported Wednesday that Volcker would be leaving his position as head of the president's Economic Recovery Advisory Board, but would likely continue to advise the president informally on economic matters.

Volcker's departure would come as the latest such exit from the White House. Former Chief of Staff Rahm Emanuel resigned in the fall to run for mayor of Chicago, and National Economic Council Director Lawrence Summers returned to Harvard at the end of the year. David Plouffe, Obama's campaign manager, is expected to soon join the administration as the president's top adviser as David Axelrod prepares to return to Chicago to help craft Obama's reelection campaign.

The report comes on the same day White House press secretary Robert Gibbs announced he would be departing to pursue work in the private sector. Gibbs said the administration is currently undergoing a "major retooling" of senior staff.

 

Thu, 01/06/2011 - 00:18 | Link to Comment ACjourneyman
ACjourneyman's picture

I think you meant to say:

 

The report comes on the same day White House press secretary Robert Gibbs announced he would be departing to pursue work in the private sector. Gibbs said the administration is currently undergoing a " RESTAFFING of MAJOR TOOLS".

Wed, 01/05/2011 - 19:40 | Link to Comment Michael Victory
Michael Victory's picture

J.C. & Casey,

Nicely Done.



~MV

Wed, 01/05/2011 - 19:51 | Link to Comment Jerry Maguire
Jerry Maguire's picture

When the system collapses completely there's going to have to be two things:

1)  debt cancellation across the board; and

2)  a return to the gold standard, but in order to make this work the dollar would have to be completely revalued in gold terms.  I would estimate that the new dollar to gold ratio would be in the vicinity of...$25K per ounce.  So, you know, since the collapse is inevitable and since this is the only way to fix it you're in good shape buying gold at these dollar levels.  You'd still net a ten-bagger.  Maybe more.

But the main thing is, we can then have a real economy instead of a casino favoring the house as they all do, and in addition we get things like the rule of law, peace and prosperity, and so on.

All this would involve, and be accomplished by, a constitutional amendment in the US.

Would anyone like to see what such an amendment would look like?

Visit:  http://strikelawyer.wordpress.com/

and voice your opinion on whether you'd like to see a draft of the constitutional amendment posted over there.

Wed, 01/05/2011 - 19:52 | Link to Comment Hephasteus
Hephasteus's picture

it's interesting that that chart matches the election cycles in a sort of sinusoidal pattern. Extrapolating that chart you could infer that gains in gold will be about 23 to 25 percent in 2011 and fall down to 5 or 6 percent in 2012. Or if it follows the 2007 curve. It's looking at 35 plus percent gains in 2011.

Wed, 01/05/2011 - 20:16 | Link to Comment akak
akak's picture

Gold will rise in direct proportion to the insanity emanating from the Wall Street and Washington "Axis of Evil".

Wed, 01/05/2011 - 19:54 | Link to Comment jackpagan
jackpagan's picture

Silver on sale!  Bought some rounds today, thank-you banksters!

Wed, 01/05/2011 - 19:59 | Link to Comment gwar5
gwar5's picture

I think gold is going higher this year than it's 10 year average of 25% -- I say about 50% to about $2100-2200. Here's why:

Most of the hard decisions and really bad news has been swept under the rug for the last 2 years. It's been hidden out of sight because of the 2010 elections and the need to keep the EU duct taped together.

2011 is the year the financial chickens come home to roost. USA: State debt crises, Muni crises, Pension funding crises. Eurozone: Spain and Portugal sovereign crises come to a head, and the Fed won't be able to bail them out under the table anymore with Sherlock Bloomberg on the case. But, The Bernank has already managed to co-mingle $9 Trillion with the Euro CBs in exchange for their trash derivatives, so their problems are now our problems. Throw in an unexpected oil or military event, and you've got a real move in gold.

The uncertainty and 2011 economic rollercoaster will drive gold up a higher % than usual. That's just how I see it.

Besides, we all have a date on December 21, 2012 with doomsday and the countdown continues!

 

 

Wed, 01/05/2011 - 20:10 | Link to Comment Bastiat
Bastiat's picture

You could well be correct.  When the fiat ponzi starts to really come undone, the gold price of dollars will be very low indeed.

Thu, 01/06/2011 - 00:15 | Link to Comment MrSteve
MrSteve's picture

Of course, ECB's problems are FED's problems, that what lender of last resort means. Our FRN reserve currency is underpining the Euro and the Yen and Yuan, by definition. The reserve currency is the common denominator in all FX calculations. When it implodes, it takes every fiat with it. Reference the Spanish dollar in the 1500 and 1600s and previous to that, the Roman denarius. Debasement through inflation (New World metals) or clipping, the Roman disease, it all leads to a collapse of the central monetary authority. Gold is the least "loss-prone" investment media of all, of all time.

Wed, 01/05/2011 - 20:07 | Link to Comment lawrence1
lawrence1's picture

Based on my brother-in-law index, both gold and silver are going to appreciate much more than in the last year.  Said person has been in classic denial of negative economic news, spinning everything pósitively, refusing to read anything questioning his interpretations and dismissing my viewpoint.  He is going to buy silver and I think he represents a segment of Americans who will also do so.  I also note that more and more middle class Americans are emigrating, I see it here in Nicaragua.  Before they were visiting and considering it, not they are doing it.  Virtually all rentals in Granada are taken. 

Wed, 01/05/2011 - 20:26 | Link to Comment Bastiat
Bastiat's picture

Interesting anecdote, Lawrence. Thank you.  That's my experience as well -- I know one person who has any signifcant % of his money in gold or silver.  And he's a retired bond pro who was on Wall St in the late 70s and early 80s, so somewhat exceptional is his experience vs JohnQ.

Wed, 01/05/2011 - 22:41 | Link to Comment gwar5
gwar5's picture

Granada is excellent. Good move. Lots of expats. High season now.

I have a place near San Juan del Sur. I should be there now but have biz to attend.

Wed, 01/05/2011 - 20:24 | Link to Comment Trailer Trash
Trailer Trash's picture

Dear ZH Community, Please provide some advice.  I would like to purchase some Gold and Silver today, my first purchases.  I have decided to buy Eagles just for personal reasons, realizing that there is a premium. My questions are: Regarding Gold, Does anybody care about "Dates of our Choice" versus a specific year and "Original Mint Tubes" or "Brand New Coins".  I would prefer the "cheaper" gold unless all of the other stuff is of any specific concern or value. Also, if the premium is roughly the same, is there value in purchasing .5 oz versus 1 oz.   Regarding Silver, Monster boxes, sealed or unsealed.  Again, I would prefer the "cheaper silver" unless there is some express advantage in the purchase of a mint sealed box. From your previous recommendations, I understand that Tulving is a reputable house from which to purchase.  Yes? 

Wed, 01/05/2011 - 20:33 | Link to Comment Bastiat
Bastiat's picture

Gold is gold unless you are playing the numismatic game.  So "dates of our choice" is fine, imho.  If they are not "perfect" this might make it harder to recover the premium you pay (over spot).  If you are buying to hold, that will be a decreasing percentage of the whole value.  You might check call a dealer who also buys (like Tulving) and ask what they pay and what they look for.  Good luck.  Oh I just see you asked about Tulving. Yes they are tops and best price if you are doing the size.

Monster boxes --  I mean why pay for sealed when, most likely you are going to pop 'em open when you get 'em anyway?  JMHO.

Wed, 01/05/2011 - 20:37 | Link to Comment Hephasteus
Hephasteus's picture

Gold rules. If it sings and rings it's gold. If it doesn't it's not. Doesn't matter if it's bars or coins or as long as it's gold. But all that being said krugerands are good choices for being a good durable coin.

The collectors are just crazy cat ladies they hang on the walls to give the place ambiance and mistique.

Wed, 01/05/2011 - 21:55 | Link to Comment UncleFester
UncleFester's picture

I thought they were dogs playing poker...no wait, that's those cats on Wall St.

Wed, 01/05/2011 - 20:51 | Link to Comment Clint Liquor
Clint Liquor's picture

Tulving, Bullion Direct, APMEX, Colorado Gold, all good. Don't get sucker into paying more for 'sealed' Monster boxes (the seals are easily removed and replaced). You want easily recognizable coins and bars minted by government or refiners. Stay away from cast 100 oz bars as there have been tampering in the past. Numismatics are a rip-off unless you are an expert, so dates are meaningless. If you have other questions try the forum at Kitco.com.

 

Wed, 01/05/2011 - 21:15 | Link to Comment Eric The Red
Eric The Red's picture

Yeah, "dates of our choice" is fine.  Go with the cheapest.

On the 1 oz vs fractional size gold eagles, the premium tends to go up the smaller the coin.  Rolls of 1 oz'ers would be the cheapest.  On the other hand, if this goes the way we think this will, even a single ounce of gold will be a serious chunk of change.  Might be easier to sell smaller coins more discreetly if that is a concern for you.  Why not some of each?

Wed, 01/05/2011 - 21:25 | Link to Comment Dr. Porkchop
Dr. Porkchop's picture

If you're buying bullion for investment then an oz. is an oz. is an oz. I'd say that any recogonizable round from a known producer is as good as another. Me, I buy Maples because I'm in Canada and they're available. My experience is with silver. I've yet to buy gold.

Thu, 01/06/2011 - 01:20 | Link to Comment blunderdog
blunderdog's picture

I have heard from a few 'bugs that currency-denominated coins are superior to rounds because faking one automatically makes it "counterfeiting," and thus a more serious crime than shaving weight or misrepresenting purity.

This is what I'd call a quasi-logical argument: seems to me if someone is faking on rounds, they probably have more to worry about from the ripped-off customers than from the Feds, but I'd be interested to hear other opinions on it.

Wed, 01/05/2011 - 20:26 | Link to Comment DavidPierre
DavidPierre's picture

 

                 Sell your Gold?

 

Smackdown with a follow through today. Please step back for a second and realize the mechanics of this trade. By selling your Gold or the miners and transferring the capital into Dollars, bonds, or even stocks is a bad joke!

By taking this action you are leaving your safe perch high atop a mountain while the flood waters of insolvency are rising all around. Moving into ANYTHING that is Dollar based is suicide because the issuer of these "Dollars", the U.S. government, is an insolvent and bankrupt entity no matter how many investors have their heads buried in the sand. We are living through the bursting of TheDollar and thus a Treasury bond bubble of biblical proportions!

Just because the world has not recognized this bankruptcy does not mean that it is not a mathematical fact.

Think back to each and every bubble in history, each one occurred and at the "top" very few recognized it. This is by definition how bubbles are created! You cannot have a bubble unless there is "mass delusion" just as you cannot have a crash unless investors collectively "wake up" nearly all at the same time.

The bottom line is that Gold and Silver are truly monies and Dollars are not.

Dollars have nearly zero cost to create which among other things disqualify them from being money. We have seen on average 3-4 smashdowns of PMs per year over the last 10 years which means that if you started back in 1999 or 2000 you have lived through 30-40 of these "misdirection plays". Do not believe that this "correction" will have legs, the last 2 did not and this will be no different because the physical market is just too tight to allow much more than a 5-7% pullback.

Not only are hungry longs looking to enter on the pullbacks now, shorts have had their heads handed to them and will compete with the longs for entry!

Have no fear, the reasons to own Gold, Silver and especially the miners have never in history been as plentiful and real as they are today. Never has the world's monetary system been as fragile and ready to collapse on a global basis as it is today.

Re-fucking-lax, turn off your computer and do something real with your family and friends...  enjoy your life and stop counting "Dollars" because soon they will not spend anyway.

It is OUNCES that will count... do not give any up if you don't have to!

This is all about science at this point and the math says that the U.S. Treasury has zero chance of paying their debt in current Dollars.

Understand that this is the endgame ... EVERYTHING that you need to know!

All else is high volume noise and bullshit, intended to distract and nothing more!

via Lemet!

Wed, 01/05/2011 - 20:38 | Link to Comment bigredmachine
bigredmachine's picture

why are you dispensing advice? rednecks are already all in

Wed, 01/05/2011 - 20:31 | Link to Comment bigredmachine
bigredmachine's picture

good math.

Wed, 01/05/2011 - 20:31 | Link to Comment Federalist45
Federalist45's picture

Gold will go to $1250 or lower--buy at that level.

Silver will go to $18--buy there.

If you want to get into making profits off the dip, buy gold and silver short now, sell the short position on the dip, buy leveraged gold (UGL) and silver (AGQ) at that point.

Wed, 01/05/2011 - 20:47 | Link to Comment akak
akak's picture

Gold will go to $1250 or lower--buy at that level.

Silver will go to $18--buy there.

While you're polishing that crystal ball, care to tell us the results of next week's Super Lottery in almost any state?

Wed, 01/05/2011 - 21:27 | Link to Comment Hulk
Hulk's picture

should have asked for the winning numbers...

Wed, 01/05/2011 - 21:04 | Link to Comment bigredmachine
bigredmachine's picture

you are truly one of a kind. looking forward for your posts

Wed, 01/05/2011 - 21:16 | Link to Comment ZeroPower
ZeroPower's picture

No...do NOT buy leveraged gold unless you are strictly in it for a day trade, which from the post, i dont believe is what the author is amplying.

Do NOT ever invest in any leveraged ETF.

Wed, 01/05/2011 - 22:03 | Link to Comment UncleFester
UncleFester's picture

I have used the leveraged plays DGP and AGQ for a year to increase my physical purchases, but then again,

I Fester

Wed, 01/05/2011 - 20:47 | Link to Comment jimgcpa
jimgcpa's picture

Gold has no fundamentals.  It trades at an infinite p/e, pays 0% dividend and never will, advertised continuously for sale on the web and TV, has no utility value....it's a state of mind.  Good luck Idiots.  After a 9 year bull run, I hope the supply of fools is high enough to get you dorks out at a profit.  LMFAO!!!

Wed, 01/05/2011 - 20:51 | Link to Comment akak
akak's picture

Thank you for that summary of the most inane and idiotic ant-gold disinformational bullet points!

But allow me to add:

Fiat currency has no fundamentals.  It trades at a negative p/e, pays 0% dividend and never will, depreciates continuously, is promoted continuously by the government and sociopathic elites on the web and TV, has no utility value....it's a state of mind.  Good luck Idiots.  After a 90+ year bullshit run, I hope the supply of fools is high enough to get you dorks out at a profit.  LMFAO!!!

Wed, 01/05/2011 - 21:06 | Link to Comment TheGreatPonzi
TheGreatPonzi's picture

jimgcpa is a troll who admitted it, like gloomboomdoom. I wouldn't take any of his posts seriously.

Wed, 01/05/2011 - 21:03 | Link to Comment CrazyCooter
CrazyCooter's picture

Cash doesn't pay interest either ... if you don't risk it that is.

Cooter

Wed, 01/05/2011 - 21:31 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

Listen here Pilgrim - my name is Cork ,Dork of Cork

www.youtube.com/watch?v=9O8oLqY2sxo

 

 

 

Thu, 01/06/2011 - 01:03 | Link to Comment Chupacabra
Chupacabra's picture

Jim, you forgot to mention that "you can't eat it."

P.S.  Thanks for calling me a dork.  Now I'm going to cry myself to sleep tonight.  Bully.

Wed, 01/05/2011 - 20:49 | Link to Comment Pretorian
Pretorian's picture

Could not think that I could see on ZeroHedge screming "Time to buy Gold" this is good signal to short it. BUBLEEEE!

Wed, 01/05/2011 - 20:58 | Link to Comment Clint Liquor
Clint Liquor's picture

Yes, you should short it with every penny you have. Borrow money from anyone who will loan it to you, max out your margin account and all your credit cards and short it!. Gold is going to $1250 and Silver to $18 because someone on the internet said so.

Wed, 01/05/2011 - 21:27 | Link to Comment Hephasteus
Hephasteus's picture

I say we mind fuck them. Start pretending to capitulate. We wouldn't want them thinking that we are better than they are. Let's get evil.

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