This page has been archived and commenting is disabled.
Guest Post: Proof Of Gold Price Suppression
Adrian Douglas, board member of GATA, once again takes a long hard look at the gold market and provides evidence of gold price manipulation. His conclusions:
- the gold price is suppressed through fractional reserve bullion banking
- the gold market is selling on average 45 ounces of gold for every one ounce of real physical gold via “unallocated gold” (fractional reserve bullion banking). In other words the gold market is backed by only 2.3% gold
- The true price of physical gold is currently around $54,000/oz if fractional reserve bullion banking did not exist. In the presence of fractional reserve banking with 2.3% gold backing the market price of “gold” is reduced to $1200/oz
- The US dollar has a purchasing power that is 45 times over valued
- The way to end gold price suppression is for investors to ensure they have allocated physical bullion preferably held outside of the bullion banking system
The solution? Buy physical - "The sick joke of the Gold cartel is that whether you hold dollars or unallocated gold you only have 2.3% of gold backing! However, the trade of the century is to buy actual physical metal with your dollars, or if you have unallocated gold to demand physical delivery. In this way you can trade something with 2.3% gold backing for an investment that is 100% gold."
Proof Of Gold Price Suppression, Submitted by Adrian Douglas of Market Force Analysis
»
- 16775 reads
- Printer-friendly version
- Send to friend
- advertisements -
"So, it looks to me that there is a dislocation and either the things that people need and use have to increase in price substantially or gold needs to revert to the mean."
There is a difference between gold and things you need. Here is the problem. Today, I deliberately consume less than I produce. I do this in order to ensure that I will have what I need in the future. I need a mechanism to transfer excess "wealth" from today, to some day in the future when my consumption might exceed my production. How do I do that? Food goes bad after a few days. Can't store electricity. Can't store that much water. Electronics have a short product lifetime. So, seriously, what do I do? Gold is the only thing I can think of. OK, nice guns have a long shelf life, and are pretty good at preserving value, but they do carry some political risk. Today, you can buy/sell/trade guns pretty easily, but they are eager to shut that down. Land is pretty nice, but hard to buy/sell in smaller chunks, and you have an unknown property tax liability as time goes on. Rental property? Not sure I want to be a slum lord, and deal with deadbeat renters. So, how do you transfer unused resources from today to some date in the future?
Oooh, oooh! I know (raises hand vigorously) --- buy gold!
Do I get an A?
Well stated Reb. "Fiat dollars" as an answer will get an F on this test.
Well done Rocky, yes you get an A.
Seriously though, while I am definitely in the gold camp, I would like to have some additional diversification, but I have been unable to find any good solution other than gold/silver. Most other things either have a short shelf life, or are not a dense enough store of value. The only other thing I have come up with is to make investments in local production capability . . . wind turbine, solar plant, hydroponic greenhouse. On the surface, none of these make sense today . . . you can pretty much buy food or electricity cheaper than you can make it, if you consider required capital investment, but it serves as a hedge against unknown prices/availability in the future, and provide some degree of diversification.
Yup, got it... no fiat currency has ever lasted more than 62 years or so and gold has always been an accepted currency.
It all holds together as long as gold is scarce and people who have things that we need every day accept gold in exchange... err in a reasonable proportion, since gold is so valuable.
Yet, I cannot say that gold is particularly convenient. Making change is a beech and with setting off metal detectors and all. It still seem incongrous to me because either the US dollar is going to fail (quickly) or it is not. If the US dollar does not fail (quickly) then the gold is useless. If the US dollar does fail, we have some bigger problems and I have to find someone with food who is going to take my gold in exchange for food.
IMO, a slow collapse of the dollar means to me that it returns to the mean.
What? It is apparent that you are laboring under some rather glaring misconceptions about money in general. Scarcity of gold was the original impetus for its becoming money I suppose, but the advance of society and economics in general have changed all that.
The antecedent of "it" I presume is "gold"? If so, then you could be right, but the "value" of gold will not change -- only its "price". It is not necessary for others to accept a gold coin in trade for a gold standard to operate.
http://fofoa.blogspot.com/2010/06/how-can-we-possibly-calculate-future.html
http://2.bp.blogspot.com/_nSTO-vZpSgc/RnwyB3vw3NI/AAAAAAAAA5M/eAJ-zexw-1A/s1600-h/purchasing-power.png
http://thedailybell.com/1126/What-You-Always-Wanted-to-Know-About-Gold.html
It would be hard to make change from an ounce of gold, but I view gold as a store of wealth. That's our long-term portion. Silver blocks and bars are mid-term stores. Junk silver is for everyday transactions.
people keep forgetting one thing..gold and silver have been money for 600 years...all fiat money eventually goes to zero..the dollars fate will be no different..not backed by anything...and being printed into oblivion..and any moron who thinks this can not happen in the good old USA...needs to go look up the revolutuonary war..or the civil war or a smaller instance the depression..anyone not in the metals or their shares...will lose 60 to 90 percent of theis savings...and if things get bad..they will be forced to go to a gold standard..and gold will be antwhere from who knows....5500 to 55000...take your pick..but it certainly will be better than being in the dollar.....so stay ignorant of history..and you and your family will go hungary......then what will you tell your loved ones..I was stupid enough to listen to Johnny Bravo..talk about shit for brains..he will be looking for road kill...
+++
am I the only one on this entire goddamned forum who understands Peak Theory?
Gold's price gains began in the year coincident with gold's supply peak. The "mean" would shut in a lot of production because it's above that cost point.
The same is true with oil. The fall below $38/bbl made the entirety of nonconventionals unprofitable. That's an untenable price position. Those who claim oil should go back to $20/bbl are simply as ignorant of oil production realities as those who claim gold can drop to $500.
If either of those things happen, uneconomical production gets shut in, supply drops rather precipitously, and price climbs to reflect it. THAT is the "new normal" in a scarcity climate. Perpetually high and *rising* real prices.
I suppose that I would buy that if gold consumption (not hoarding) was increasing and that it was not an untapped and reclaimable resource. Oil can be used only once ... then wait a few million years to use the carbon again. Not so with gold.
But gold is not really used for anything appreciable these days. We saw a chart here indicating that the use of gold in jewelry is declining. Gold is a fixed resource, but I am pretty sure we have just scratched the surface at extracting it from the earth. The DRC holds more gold than South Africa and closer to the surface, only there are political issues.
the production of gold is FOR the service of HOARDING.
Oil production serves consumption of the oil. Gold production serves the demand to hoard.
@Trav
"am I the only one on this entire goddamned forum who understands Peak Theory?"
__
Det. Thorn: Would you believe bodyguards are buying strawberries for 150 D's a jar?"
brought to you by Soylent red and Soylent yellow, high energy vegetable concentrates, and new, delicious, Soylent green. The miracle food of high-energy plankton gathered from the oceans of the world
and, my favorite:
Remember, Tuesday is Soylent Green day.
The mess boys ate the strawberries. I saw them. I kept my mouth shut because I
didn't want them to get in trouble. But I told the captain. He said he'd hold up my orders if I told anyone. So please don't say anything.
I'm happy to get out of this madhouse. So long.
umm, sorry, did you say something? i was staring at your tits.
If we were only discussing the price of physical gold, Trav, you would probably be right.
But the item in question is predominantly paper, with zero cost of production, and (so far) almost unlimited supply. Golds price gains beginning in the year of peak supply, in that case, probably are coincidence.
Gold is gaining in price to support the $US and its dependent fiat currency system. It is leased into the market to be fractionally reserved into the market, creating international liquidity.
I agree however, that once gold retreats to its cost of production, production would quickly dry up.
You presume that if we understood the "peak gold theory" that we would be compelled to agree with it. Some of us do understand it yet do not agree. We'd have to have a golden meteor shower (don't go there!) and inundate the Earth with millions of tons of pure gold to affect the balance. The measly amount being mined is insufficient.
anybody who "disagrees" with Peak Theory is an idiot and is tantamount to being in disagreement with things like Relativity or Evolution. May as well believe in fairies or the feasibility of perpetual motion or growth.
Gold already DID peak...in 2000. It's well and good to flat-earth the issue of oil when production hasn't been dropping YoY for a sustained period, you know, like GOLD HAS. For a decade.
As long as demand to hoard stays out there and supply for hoarders declines, price MUST rise. It's as fkin simple as that, no need for vast rightwing conspiracies or martian mind control rays. I submit that demand to hoard ain't goin anywhere, but supply is -down. Add this 2+2 in your brain and see what you can come up with. All y'all.
OK, you win. I'm an idiot. Relativity is a crock, Evolution is the devil's work, and Global Warming is true. Let's agree to disagree.
I am storing vodka and have a hand crank reverse osmosis machine. Maybe that will help.
Though I do own me some gold, I am also interested in what else may be of value. I found an interesting article by Dmitri Orlov titled Post-Soviet Lessons for a Post-American Century. Orlov describes how the barter markets pop up and what is of value: gold, soap, razors, rechargable batteries, drugs etc. See the section Investment Advise for the full info.
Here is the link http://docs.google.com/Doc?id=dtxqwqr_20dc52sm
I also read an interesting article about the economic collapse of Argentina here is short quote..
Social Studies teacher -“You see, the income from the middle class is not enough to function as middle class any more. Some from the top class fall to middle class, but the vast majority of the middle class turns into poor”, said the teacher. I don’t know how many people in that room suddenly understood that he/she was poor.
“You see, we have a middle class that suddenly turns to poor, creating a society of basically poor people, there is no more middle class to cushion tensions any more. Middle class suddenly discovers that they are overqualified for the jobs they can find and have to settle for anything they can obtain, there for unemployment sky rockets, too much to offer, too little demand. You see they prepare, study for a job they are not going to get. You kids, you are studying Architecture because you simply wish to do so. Only 3 or 4 percent of you will actually find a job related to architecture.”
Here is the link http://www.sublimeoblivion.com/2009/12/21/surviving-collapse-1/
As much as I would like to think that owning gold ("gold bitchez") is the answer I believe survial is much more complicated.
Here is one last link to an article with a picture of Argentinaeans fighting to slaughter some cows from an over turned truck http://www.washingtonpost.com/wp-dyn/articles/A47822-2002Aug5.html
I am stocking up on a little of everything needed for daily survial (yes including gold and silver bitchez), and besides a shit load of weapons and ammo, what else would be good for survival and barter?
I suppose the answer to that question depends at least partly on your personal moral beliefs!
Orlov makes a decent case, anecdotally, with more on his blog - (another EDIT - http://docs.google.com/Doc?id=dtxqwqr_19gjjvp8)
EDITED
Which is available here...http://cluborlov.blogspot.com/ His Five Stages of Collapse post is good, as are some of his recent lectures (maybe a TED talk if I remember right?).
His solution, I believe, is absolute transience on the sea. He's literally got a boat that he's ready to jump in. Maybe no small coincidence that the billionaires like Gates have subs, islands, and the rest at the ready?
My "survival" purchase was a Berkey Water Filtration Unit. The filter has a 50 year shelf life. I live in Florida where we occassionally have hurricanes, so my purchase is a win, win. Win 1) for the end of the world and (Win 2) hurricane season : )
https://www.pleasanthillgrain.com/berkey_light_big_berkey_water_filter_british_berkefeld_portable_purifier.aspx
+1.
Next up:
Pressure canner, 500 pint jars and about 5000 extra lids.
The Big Berkey was the first item on our list. Our second was putting up downspouts and connecting some 58-gallon rain barrels to them.
Argentines are illiterate in how a Fiat System works. Why is that mostly? I'll tell you why. Its because "The People" equate household finances with government finances. Even educated people that go to university. Thats why they are doomed.
My barterware of choice is toilet paper. Infinite shelf-life, and few people will think of seriously stocking it. If the shit doesn't end up hitting the fan (yuk, yuk)... well, then I probably won't have to ever buy it again in my lifetime. Otherwise... Gold, Silver, and toilet paper Bitchez.
It's shelf life can be limited by fire and liquid. Also it is bulky and cumbersome. Plus you can't hide it easily during transport. It is not durable outdoors. There are many substitutes including cloth, baby diapers, cotton, leaves/plants, etc.
You are correct, BUT.... Despite having aquired 99% of the things a bunker nut survivalist wishes for, toilet paper might be the one luxury I miss the most.
That said, my attic is getting more and more full of it every week.
Charmin Bitchez!!
toilet paper
This is one case where using paper beats holding physical in your hand.
Orlov's commentary is good and illustrates the futility of the gun nuts who stockpile for the zombie apocalypse.
Let's say that a group of combat Marines forms a gang that decides to enter the drug trade or just perform home invasions. They didn't serve together, they just met.
You and the HOA decide to stand up your own defense. Who's coming out on top? This would be like playing a pickup football game against a group of guys who showed up having never known one another but are trained players operating in the same play system. You might be a good player, all of you on your side might be individually good, but they all know the routes, coverages, protections, blocking. When the QB of their team sees you playing an inside coverage, he knows exactly where to put the ball to prevent your having a high probability of making a play on it. What's more is the trained WR receiving also knows where the ball should be. The QB knows that he knows where to expect it, and the WR knows that the QB knows where to throw it.
This is because they are TRAINED to be in synch. Even when I play QB for kids at the local field, my sons and I have run plays and particular routes. We cut the kids up who do not know them. This is at a very elementary level. A team of trained guys operating together will DESTROY very quickly a group of guys with no training.
The Marines will all be operating under the same playbook, having trained as commodities within the same organization. They will all know implicitly the role they are in as well as the roles of the others around them. They will operate as a unit and they will quickly close on and kill those who cannot operate in such a manner. Nevermind the advantage that real combat experience gives. If you don't know what a bounding overleap is or a diagonal peel, nevermind the ability to execute one with a person you don't know, then you're simply fucked if it turns into a firefight.
Some of us are combat trained.
I meant men, Janice.
The rest of the HOA ain't.
Depends on your neighborhood.
What about the entrepreneurial ex-Marines who offer security and protection for pay? Once they get set up and are earning a good profit and have their families established in a community which they help make safe and prosperous, I'll bet they'll be very effective against looters who live and die on the run.
I'm not a military guy, but I think your rogue marines would pass on assaulting a fortified family homestead in the backwoods. They can find easier prey. (Anyone who believes there will be a zombie apocalypse should also plan to get out of the cities.)
Also, in the zombie apocolypse, the rogue marines wouldn't have all the usual support that they enjoy now. No helicopters, radios, probably no body armor or flash-bangs.
Plus, there aren't actually that many combat troops compared to the whole population.
Finally, look what happened at ruby ridge. The US marshalls didn't come away unscathed, despite their superior training, communications, and weaponry.
What percentage of people in this country are equipping themselves to defend their homes and communities with guns? Maybe 10%? And mostly out in low-density rural areas.
So, with 90% (I'm making these numbers up) of the population unprepared or unwilling to use guns to defend their homes, and with the majority of them living in high-population-density areas, where is a smart roving gang of ex-marines going to go for its pillaging? They're going for the low-hanging fruit.
You keep harping on this "don't be a wannabe Delta Force d-bag" thing, which to some extent is a realistic concern, but the smart ex-military guys - even if they're just out to loot and pillage - are going to be using similar advice. Why would they walk into an unnecessary gunfight at a distant rural homestead containing a few families at most, when they can just shut down the power to a gun-controlled urban highrise and have their way without resistance?
Also, it would seem that even if your unstoppable marines are determined to pillage a little out-of-the-way homestead in the country, the victim's number is up whether they have a gun or not. So, in that case there's still no harm in having one.
+1
No matter how many skills and years of training someone has they can't dodge a decently-aimed bullet. Can't. Cannot. Will not. They can only lie in wait, observe community patterns, and use those patterns against the unwise. If discovered they cannot move fast enough to avoid some hick with a deer rifle. And because they know this they will likely move on if awareness and discipline is relatively high.
Stray special forces and Mexican traficantes will be far and few between anyway after a while. It's like worrying about solar flares knocking out your circuitry.
This is true. Guns are of no help unless you know how to use them, beyond just backyard shooting, heated or air-conditioned target practice ranges, or hunting fuzzy animals.
I suppose that's why a bright line is whether the Rule of Law survives or not. If the sovereign stays strong enough, you're probably okay with a 12 gauge for deer, turkey, whatever-you-can-eat hunting. The sovereign falls, and the world darkens further, if only because of the groups you describe. Those guys (ex-military, etc.) are already planning and training.
So just as in natural systems, it is not competition that controls as the dominant force. Studies are showing that species rarely go head-to-head in competition, due to the substantial costs of doing so that are incurred by both. Instead cooperation is the key force. That said, if the sovereign falls or becomes wholly corrupted, the kumbaya (sp?) societies of "green" such as Ithaca, NY will be easy pickings. That's a worst case Dark Age, which I don't believe will come to pass.
Some form of soveriegn almost invariably exists. We just need to decelerate back into a proper scale relative to Earth's capacity to support life.
Buying Gold is a vote for China Reserve Currency Status. Go ahead, commit suicide if you wish. Also, Mako is a disciple of HyperTiger's crazy blog on the net. Mako, like 99.99999999999999% of the ZH crowd has no idea how a Fiat System functions.
99.99999999999999% of the ZH crowd
ZH is popular and all, but it does not have nearly enough members to justify typing that out rather than just saying "100%." Looks like hyperbole, rather than either economics or mathematics is your long suit.
The purchasing power of US Dollar, however, is backed up by the military and economic power of the United States, while gold shines only when all other currencies fail.
US is still a superpower, thus USD is still the reserve currency. Other reserve currencies are vulnerable and weaker.
and the US military is funded through deficit spending, borrowed from China. What happens to military power when China stops lending? A horse if more powerful than an F-16 with no fuel or spare parts.
Wrong. You don't understand the operational limitations of a Fiat System. You have just equated government finances with household finances. Its completely different. In fact, you wouldn't be able to even quote a highly technical textbook on the constraints of a Fiat System because you've never read one. Neither have I for that matter. It doesn't exist.
What the Fuck are you talking about.. you haven't said one thing that makes any sense. Explain yourself.
Your mistake is to try to make his comments make sense.
I think he ate Mako.
That made my day.
Actually, if there really is a zombie apocalypse it makes more sense to become like Hannibal Lechter with his taste for human flesh, rather than Clint Eastwood, which takes a quantum leap in skill that the average gun nut will never attain. I plan to watch "The Road" at the earliest opportunity.
http://www.youtube.com/watch?v=10zqzZU3KCk
I see what you did there, with the capitalized 'Fuck'. lol
China is the 'operational limitation of [our] Fiat System'. Without their lending, we're stuck with printing our own debt. Once we start doing that egregiously (I mean we've always been doing it, just that we can hide it better when there's bonds and taxes to cover for it), collapse is imminent. Even hyperspeed money printing won't pay for the military at that point.
Greenspan in 1998, before Congress:
"central banks stand ready to LEASE GOLD in increasing quantities, should its price rise."
http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm
William S. White June stipulated in 2005 ( head of the Monetary and Economic Department of the Bank of International Settlements in Basel ):
"One of the five main purposes of central bank cooperation is the provision of international credits and joint efforts to influence asset prices – especially gold and foreign exchange – in circumstances where this might be thoughtful."
Australian Central Bank 2003:
"Foreign currency reserves and gold are held primarily to support intervention in the foreign exchange markets!"
Dutch central bankster Nout Wellink (CFR member and Bilderberger) always said to his colleagues:
“There are two thing you can lie about as central banker, gold and interest rates.”
Jim Rickards about Gold Manipulation:
“We call it market manipulation the central banks simply call it policy.”
I agree with the article and I like physical gold but there is a fatal flaw: The Fed and world CB's absolutely, positively will never eliminate paper gold thus allowing speculators to do what they do in addition to adding their own manipulation. I hate to say it but "Freegold" is fools gold.
You could very well be right. The pendulum will swing, and perhaps not all the way to Armageddon that is predicted. But, without some impetus the pendulum will not move. Lend a hand and we'll see how far we can push it!
If you actually understood Freegold, Yikes, then you would understand how CBs are going to use their gold reserves to recapitalize, after the debt collapses.
Paper gold is the mechanism supporting the $US currently, or it would have already collapsed, years ago.
The rest of the world is interested only in ending this as cleanly as possible, not in seeing it continue forever.
Just got back home here after a visit to the Emerging Third World formerly known as the Land of the Free or Brave or Indebted...I don't quite remember. Gold is trading $50-75 BELOW spot here. Didn't know JPMorgan was in this country, too! Given the Baltic Dry Rates, it might be worthwhile to charter a 5000 dwt vessel and arb the world.
On the other hand, in a land where the per capita income is $250/year, an 89 foot by 89 foot parcel of empty land---in a residential area to boot---just sold for $6 million. This is in a city where electricity runs upwards of two hours per day. Madness knows no borders.
Bottom line is that manipulation believers can just keep buying if they so choose. Maybe the game ends tomorrow, maybe a hundred years from now. The trick in this or anything else is plotting the possible scenarios, then imposing one's estimated lifespan on to the time line. It's all guesswork. Pick your poison. We'll probably all only know in retrospect, which is as good as any argument for diversification.
My friend you are too logical.
That post was entirely too reasonable and thought out, thus I am totally confused.
In the future please refrain from doing this.
Thank you.
I will, but a combination of jet lag and/or your avatar are uncomfortably distracting. Does your avatar live in a world without gravity? Do I need a visa to go there? Any special shots or inoculations?
Reminds me of "Girls on Trampolines" on the Manshow (miss that classic).
Can you really trust the Gold content there ? Explains the spot price I'd say.
Spot as in US coins, Maples and Rands. The same coins you can buy on EBay for spot plus $200. Private sales, not shops.
Like the guy on the New York sidewalk selling Rolex watches on the cheap...be careful of counterfeits...US Gold coins especially.
No, they are quite real. Perhaps it's like the Earth changing its magnetic field, but just as the West begins to worship gold, in the East it is losing its luster.
Your posts have usually seemed pretty rational to me, but if your at all serious about coins that far under spot I'll meet you with a Fisch and I'm bid for 100 coins. How do we work this - I assume you are back in burma, I'm near Chiang Mai. Where and when and what currency? If the first transaction works I'm size bid for all you can get.
Come on in. Go to the daily gold market (Shwe Bon Tha Street) and buy what you want. You may have a problem with the X-Ray on the way out, but I never have. Find enough and pay for your trip.
Sorry, WHERE exactly is this? I can and will arb the shit out of that place, via backpack if I have to.
I didn't like this article much.
He says that since annual supply from the mines is only 2000 or so tonnes & annual net turnover of gold is much more (forgotten the amount), the price of gold is obviously suppressed.
What about the other 150000-200000 tonnes of gold, almost all the gold ever mined in human history. You think it sits in dark vaults gathering dust? Bullshit. You think the Saudis earn no yield on their vast hoard? Bullshit.
Gold is still money, it is deposited in banks & lent to others. This is what drives the price of gold.
"Gold is not like other commodities where supply is economically driven to ramp up and meet demand as prices rise."
Not altogether true. There are mines that make no sense at $300/ounce but look pretty good at $1185. I've seen a gold rush in Asia---mostly driven by the Chinese---once prices hit $1000. This is gold whose cost of production---in monetary terms---is less than $100/ounce. In non-monetary terms (e.g., death from cerebral malaria, Russell's Viper bite, dacoit attack, environmental degradation), there was good reason to ignore the previously unknown potential of the area.
While that may be technically correct, because gold is not consumed like all other commodities, a surge in new mine supply of gold very small impact on total gold stocks.
Unlike any new supply introduced to any other commodity.
Yup. Gold is like any other money when it's not blatantly manipulated.
Warren Buffet said some stupid shit about a Martian coming to earth and what we do with gold, digging it up and then burying it again. Real clever there, Warren.
How would a Martian think about cutting down a tree, making paper out of it and then trading it for an automobile? Who is the fool in that transaction?
Don't know why you put much weight on this fofoa Rocky, I find it mostly incomprehensible.
Yes, the stock to flow ratio of gold is the highest of any commodity, this is what gives it its utility. However;
"Stock" means those who are sitting tight on their physical gold, letting it lie still for the future, and "flow" means those who are presently trading their gold.
This is incorrect, stock is the amount that exists, flow is the amount of annual production.
A order of magnitude more gold exists than is produced every year. It is this stock, much of which exists as bullion, which can be lent out, that drives the price.
You don't get to define the terms to suit your own Weltanschauung. In this case, the term "flow" is exactly that -- gold that moves, period. Now, go back and try again. You'll never get it, until you get it.
If you don't understand FOFOA, it's not because he is wrong. Perhaps there is some other reason.
If you found it comprehensible, you wouldn't need to ask, would you?
Rockys quote makes perfect sense.
For a start, it wasn't Rockys quote, he got it from fofoa, which is mostly incomprehensible.
Second, it's wrong. Stock is the amount in existence, flow is the annual production. Just because it is circulating does not make it cease to exist.
It only seems wrong because you clearly missed the point.
Instead of splitting hairs of whether your exact understanding of "stock" and "flow", (which, incidentally is how FOFOA framed each term as he then went on to give his definition for each term, thus giving his context for his subsequent explanation), why not try comprehending the quote? Note that his definition of flow includes new production.
Here is the entire quote, for easier comprehension:
You can argue the definition of terms all you like, but you can't argue the logic.
Thanks for posting it. I was reluctant to because he had obviously not read it anyhow.
The main problem with most arguments is that there is a lack of agreement of terms before the debate begins. Same is true in the "inflation/deflation" debates. People are making argument from differing definitional positions. It will never work until a common, accepted glossary of terms are defined.
This theory only holds water when people "hold", which they seem to be doing now.
But what happens to the price when people decide to sell?
Just like the stock market, the early birds will catch the worm and the rest will wonder what the hell just happened to them.
"He says that since annual supply from the mines is only 2000 or so tonnes & annual net turnover of gold is much more (forgotten the amount), the price of gold is obviously suppressed."
My point earlier..... doesn't make sense.
I very much believe in the gold price suppression regime and in the value of holding physical, but I think there are serious flaws in this article.
1. If M3 is taken as the baseline for computing the FRR, then it is obvious that it hasn't changed much from 1971, oscillating between 1 and 9 percent, which explains very little about the dollar price change. If the M3 FRR is so important, then why was the dollar price of gold so low under the pre-1971 regime of convertibility? This ratio tells us very little.
2. I expect that the total tonnage of gold traded on the LBMA annually does not purport to reflect actual gold in existence but merely total volume exchanged -- like a bridge that carries an astronomically high number of cars per years does not mean that there are that many different cars in existence. It's the same gold traded multiple times.
"The true price of physical gold is currently around $54,000/oz ...."
Darth Sidious: [to Separatists] I am sending you my new apprentice, Darth Vader. He will... take care of you."The true price of physical gold is currently around $54,000/oz ...."
Actually, I just realized I'm a millionaire (again)
WoHOOO!!
Whatever theories one accepts, I am driven by markets. It appears that TPTB are jumping on the deflation bogeyman to thus prepare the sheeple for QE2 leaving port soon. Thus the fiatsco/gold and SPY/gold ratios are likely IMO to continue the trends that have been in force for 9 years.
First, I agree, gold is undervalued.
However, this "analysis" is complete nonsense. And here's why:
Page 3 of the "analysis".... yearly gold "supply" is 4000t, but "trading" is ~180,000 t. Aren't you missing a number, there, Mr. Davis? Don't you care about how many times each ton is TRADED IN A YEAR?
What if each ton is traded, say....45 times a year. Then, the gold "supply" equals demand, and the price is "correct". You try to obfuscate this little problem with another sentence about how a "leveraged" trade like this must demonstrate that the actual amount of paper gold is the same as the traded amount. That is pretty damn lame, and not even close to correct.
The idea that the dollar is a mirror of gold holds merit, although the rest of the arguments don't.
Shame on you, Adrian Davis. Making elementary, stupid mistakes in analysis allows the enemy a position on which to stand and fight. Don't be such a fool next time.
And that was 2008 totals per:
http://en.wikipedia.org/wiki/London_bullion_market
on Wed, 07/21/2010 - 22:14
#482507
"These wacko's don't get it themosmitsos, they have no idea of the shitstorm that is coming. They all stil think they are going to get rich.
I had this one wacko telling me how he was going to buy a whole downtown block in Chicago with highrises and all for one gold coin. I told him he was a wack job, I said if you can buy that much in Chicago with one gold coin, the last place you would want to be is downtown Chicago."
__
I am glad to see that there are sane individuals.
_
And yes remember, Tuesday is Soylent green day.
Wednesday, is Soylent orange.
That’s just plain nonsense you are comparing apples to oranges. Investors DO NOT WANT PHISICAL GOLD! If they did they would buy it. They are not all that stupid not to know what they are buying is paper. Yet they buy with vigor and vim. WHY? You might ask. Because that paper pays them a nice profit. It adds to their portfolio and they can easily leverage or sell it. It is worth it’s weight in gold to the average smart investor.
If they wanted shinny yellow metal they would buy it, it’s not hard to get you know.
Every other doom porn brokerage house out there sells the stuff. GEE if it was so valuable they sure are a bunch of swell guys to let you have it for spot plus a small premium.
And not it’s actual “value” LOL. GLD is Fiat, and like all Fiat it too will fail. Taking it’s artificially high price with it. Leaving physical holders Literally holding the bag.
Good Luck
When fiat fails Gold cannot "drop in value" - as that currency is now gone. It will be converted into the new currency at whatever the current rate is.
Of course if you meant GLD, then that's worth zip.
I did mean GLD however that is what set’s the price of spot. And as you know the price of Physical comes from the same spot. So when the Fiat paper GLD ran the price from 400 dollars to the inflated price we have today. All on Fiat paper gold. It will crash and take the spot price with it. This will panic some physical holders and they will sell into the crash causing the physical market to tank with the GLD fiat Ponzi.
Good Luck.
+1
If there is ever a run on GLD as investors try to get out, only a very small percentage would turn around and buy physical after the bath they took on paper GLD.
Of course the ironic thing is, if everybody did it, they'd make a nice profit.
First ZH post, longtime enjoyer of comments section banter.
Take delivery, hold physical.
duh.
First rule of ZH is don't talk to Johnny Bravo. Ever.
Welcome to the madhouse!
http://www.youtube.com/watch?v=_L8DcjFOD1k&feature=related
Rocky,
Man, I thought that was you rootin' around my stash. Thank the Laws I had the presence of mind to say, "It's leveraged 45 to 1!"
"Princes and governments are far more dangerous than other elements within society."
Niccolo Machiavelli
Gold pitchforks bi****es!
I did not read through all the comments, but does anybody realize how stupid Mr. Douglas' "evidence" is that there is a 1:45 ratio of physical to paper gold? The one ounce held by the bullion banks for the exchanges is not held by one owner all year. It is bought and sold many times throughout the year. They are selling the same one ounce, but they are buying back that same one ounce each time before they sell it again. That is why it is an exchange or market. People are BUYING and SELLING.
It isn't like a gallon of gas that you use after you buy it. You buy the ounce and somebody else sells the ounce. Then you, or somebody else, sells an ounce while the counterparty buys an ounce.
Imagine you have one ounce of gold. Someone buys that ounce from you for $1,000. The next day you buy one ounce for $990, then someone else buys that ounce from you for $1010. The next day you buy one ounce for $1000, and then you sell it for $1005. You buy and sell 100 times over the next 100 days. You never held more than one ounce of gold at any one time, yet you sold one ounce 102 times. You never sold gold that did not exist. You never engaged in 'fractional reserve gold selling'. No one is buying less than what they are being sold. No one is misled.
If Mr. Douglas does not understand this concept of how a market works, he is severely lacking.
Well you're a troll, so be comforted by the fact that I read and applaud Adrian's report and junked your post.
Fine. No one is misled. They all get comfortable with that, and decide it would be easier to simply leave said ounce somewhere mutually secure. Fine. We'll just trade a paper contract in lieu of the ounce.
That goes fine too, but then you notice, isn't that contract I own for the same ounce your contract says you own, at the same time?
People are BUYING and SELLING. The rights to the exact same item simultaneously.
People are being misled, alright.
Unless they have possession.
More Gold Crap? Hahahahaha. I find it fucking hilarious that the Short of the Century, AAPL, is NOT every single article on this fine website. While the survivalists (uh I mean Goldbugs) continue to be mystified by FIAT DYNAMICS, the next big easy buck ride stares them right in their face. I mean the fine poster named 'Walkure' comes on yesterday, tells everyone that Apple is completely irrelevant to STARK REALITY and is literally ran off as a crank...My god its just like when gold was at $300 and nobody said a bad word about Goldman.
Physical dollars also are a fraction of the total money supply, via fractional reserve banking, say 10X, so the physical dollar is actually worth $10? So the $54K/oz is actually $5.4K/oz. in physical dollars? Just playing the fractional logic game...I do hold physical gold though.
An interesting comment.
If and when the credit bubble fully collapses, the dollar may indeed become exchangable for 10x the goods that it was before (assuming goods are available)...but that's also assuming the supply of paper money is staying constant. Which I'm pretty sure it isn't.
On top of that, the paper money system itself is at least analogous to fractional reserve banking, because the paper notes are created for a really nominal fee paid by the Fed...and they send it out into the economy by 'lending' it to banks and the Treasury, if I understand correctly. Where did it come from? The printing press, not a lot of work put into it. The only value it has is what it promises, not what it is.
If you want to get real conceptual about it, the dollar has lost ~96% of its value from when it started in 1913. I consider that the sort of fractional reserve of the dollar. (I'm not an economics guy so I make up my own terminology.) The Fed has leveraged up the currency supply from its origins...bought 100 years of boom-bust cycles ending in massive bubbles popping, all while financing massive government expansion over both domestic and foreign subjects.
If they didn't have the paper gold balloon to inflate the gold 'supply', real gold would be pulling hard on the dollar right now...they want to avoid the economic contraction that is inevitable. Paper gold was an ingenious way to kick the can for a while.
Thought-provoking idea. As electronic dollars go back from whence they came, actual paper dollars become scarce and more valuable (a kind of selective deflation).
A good idea in itself, and it's always good to keep some cash money on hand (as well as gold, of course) just in case the destruction doesn't run on the schedule most of us here anticipate. I, for one, can easily imagine an earthquake sending the tide of money out to sea (deflation) before the echo tsunami of quick-print cash comes surging back over the land.
My specific worry about dollars, and euros to a lesser extent (I live in the e-zone) is that there is so much paper cash outside of the issuing countries, much of which is counterfeit. In a fiat crisis this paper will rapidly lose its value and may come flooding back to the issuing country as every holder tries to get rid of the hot potato.
For Americans, Canadian cash might be a better bet, if you can get it. For Europeans, I'd go with Swiss, Norwegian, or perhaps Russian paper. Lots of Europeans in my area hoard banknotes whose serial number starts with 'X', as these are issued by Germany. The scenario envisioned is one where Germany will redeem (with some new currency) only those notes that it issued, and no others.
http://news.silverseek.com/SilverSeek/1279732290.php
"the centerpiece of Commissioner Chilton’s statement affirms that the new law mandates that the CFTC establish position limits in order to prevent market concentration. Position limits in silver to break the stranglehold of concentration on the short side of COMEX silver has been my mission for 25 years. Chilton confirms that will be the law. Please watch the video and then decide if my take is correct."
http://www.cftc.gov/files/oirm/video/cftc_023455.wmv
+999
if the price of gold goes to 54000 who will have the money to buy it at that price?
It is a store of wealth. It will still be a store of wealth at 54000. It is the 54000 that is not the store of wealth, now or then.
If the price of gold goes to 54000, anyone with 54000, or any part or multiple thereof, who finds that money to be surplus to their immediate needs, will have money to buy gold.
As a store for their wealth. Not their everyday spending money, but their wealth.
well, i am having a hard time imagining there not being more sellers than buyers at 54000!
I then respectfully suggest reading this comment - #483025 from back up this thread aways, which addresses that.
I cannot fault the internal validity of your arguement in 483025 but what I see here in Asia is a lot of empty gold shops after the price went up over the past six months; not many buyers off the streets now and we are a long way from 54000.
You are assuming that the USD will still be a functioning currency at that point. That may or may not be the case.
Buying physical will not make a lot of difference in the severity of the gold price manipulation; they still have the derivative (paper gold) haven't they? These two are totally disconnected and as long people believe the BS coming from the msm, nothing will change.
What is going to make a difference is total loss of trust in the system, people roaming the streets with a rope in one hand and a 9 mm in the other, looking for bankers and politicians who betrayed them, followed by total chaos.
Buying physical will assist you in helping to survive during and after the chaos.
They need something to create the derivative from, Troy.
That will be hard to do if all the physical is in strong hands.
Nuinut, they just change the rules themselves and leverage the physical 1000-1.
You will never know what happened? It is their game and there is one winner: and that is not you (or me).
With that comes the fact that 1/3 of all physical is "supposedly" owned by Central Banks. How can you fight against that? Impossible.
Rather fight to weaken the system.
But I agree that everybody should buy physical, but do it for yourself. However, I do not believe it will be a solution to gold price market manipulation.
Those CB gold reserves will be used to recapitalize when the dollar fails, and all holders of physical will be generously recapitalized at the same time.
Central Bank paper gold creation has given time for preparation, this is not necessarily a bad thing. Gave all us little guys time to follow the footsteps. Maybe we should send a thank you card.
“Central banks stand ready to lease gold in increasing quantities should the price rise.”
Sir Alan Greenspan, US Federal Reserve Bank, 24 July 1998
Troy,
my understanding of what CBs hold, is that they own barely 20% of the above ground supply, based on what each individual CB 'claims' to have. If total mined gold is 180k tonnes, then that puts CBs just short of 36k tonnes.
The US claims to have 8.1k tonnes of it, making it by far the biggest player. Then, Germany 3.4k, IMF 3.2k (double counting?), France 3.0k, Italy 2.5k, China 1.1k, Switzerland 1.7k, and apart from perhaps Russia, everyone else at under a thousand tonnes, Holland Japan and ECB being the biggest of the bunch at 0.8k.
Apparently, 50% of mined gold is now jewelry. The other 30%? I suppose, coins and bullion in private hands, and worth noting the Saudi royal palace (qty unknown).
My stats might be a bit out of date, someone more informed can provide a link, but CBs would likely not acknowledge the gold they have leased out, likely never to return. Fort Knox not audited since the fifties & all that.
Most of Germany's gold is held on trust by the USA in New York, so I'm sure that's safe (sarcasm).
Fractional Reserve banking was originally based on gold deposits.
As soon as you don't demand and verify physical, and its purity, you get screwed.
Since the Government did away with paper stock certificates, you have been getting really screwed.
It was not to save money from printing them up, or the cost for tracking by the transfer agents or because technology advanced so far that book entry was so much better. It was because you can't order your stock certificates out, so they have the ability to loan them out and profit from the lending without your knoweldge.
If everyone called for delivery of certificates, the naked short positions would be obvious. Thats why NO CERTIFICATES.
Understand?
Its the same fractional reserve lending/loaning that makes them a fortune in each of the markets. No rocket science.
Just look at your account agreement and see what they can do with stock held long in your account.
Did you think it was in safekeeping?
Ask them if you can put it in safekeeping in type 1 (cash account) and see what they say.
Try it.
What if you live 5 min from the great lake(s). Don't see water as a scare commodity.. Just need a big tank to carry it home. So next, is food. It does get plenty cold. IF they shut off the juice, no furnace. One wood/gas burning fireplace should do and some oil/candles and lots of books for entertainment. Cancelled cable long time ago, nothing to watch and pay $100+ is nuts.... But it would be tough with out the computers/internet.
And speaking of fractioanl reserve. They are the masters of something for nothing, they really figured this out long ago. You have to give it to them, smart evil bastards. They have 99% of people duped. What was that quote, if you understand it, you would be lured in by the profits. I think that's true. Not sure this battle can be won the odds are against us. But knowing the fraud, it's hard to really trust anything paper any more.
<mis-post; deleted by author>
You want to get even for being screwed and also test my knowledge?
Just ask your brokerage firm to transfer all your paid for long positions to type 1 cash, and ask them to put them in safekeeping, because your worried about the security of the markets and the firm.
See what happens and what they say.
Naked short positions would immediately be alarmed.
Spread the word, and have some fun for a change. At the same time ask your Senators and Congressman (or if overseas call Washington directly and log your request by email or post) to re-instate delivery of stock certificates.
Both these strategies need to be done together in order to have some real fun.
Make this viral on the 'net.
No cost to you and added security for the positions you hold.
Report back here.
Hmmm, not exactly "Proof". He has taken M3 and divided it by US gold reserves to come up with a price of $55k/oz.
This is all based on the assumption that a USD should be backed by gold. But the USD is not backed up by gold and no one expects it to be. It is backed by the ability of the sovereign authority to tax and hence worth the value of goods and services the market determines. Why should a dollar be backed by gold and only gold?
Further, the 45 ounce ratio based on LBMA trading is a bit of nonsense. Lots of markets trade more than the underlying value of the asset. Besides, even if all the gold trading were perfectly backed up by gold, there is no reason why an once of gold couldn't be traded around a number of times during the day. But more importantly, it has been discussed before, that many of the LBMA trades are forward contracts and therefore necessarily are only paper contracts. There is nothing wrong with that.
As I have said before, I am long gold and do believe in its long-term fundamentals, but articles like this are just non-sense.
Article I, Section 10 of the U.S. constitution, provides that "No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
Coinage Act of 1792http://en.wikipedia.org/wiki/Coinage_Act_of_1792
I am aware of the clause. However, how does it relate to my post? Just because the clause says that only gold and silver are to be money, does not mean that the clause has not been abrogated and that marketplace does/should expect dollars to be backed/convertible into gold and silver.
Even if we were going to work on the assumption that the dollar will eventually return to gold backing, the value of a dollar is a function of the taxing ability of the gov't. To what extent could they increase their gold reserves (or general wealth) through taxation (both domenstically and internationally)? So instead of divinding M3 by the total gold reserves, perhaps it makes sense to divide M3 by the NPV of the central gov't. In that case, you might find something a lot, lot closer to the current price of gold. Or you might not. But I still maintain that the calculation in the document is nonsense.
I have to agree. The 45 ounce ratio calculation does not make sense. Is there any more concrete proof out there that there is more paper gold than physical? And by how much?
Golly!
so do you mean to say I should take delivery for 10 lots of earth futures and 20 lots of mars futures dated 2012!!!
Naah I am happy sleeping ZZZZZZZZZZZZZZZZZZZZZ
I´m glad I have the 5 OIL BARRELS standing in MY LIVING ROOM as according to my spit-against-the-wind-and-see-where-it-lands analysis they are worth $78 560, each!, as physical oil is just a fraction of daily oil trades. Ok, got to go. Need to fill up my car, before the gas price goes to 25 EUR/l...
Oh yeah, I have 20,000L of fresh water stored up. You know what that's going to be worth when the world runs out of fresh water?
hmm. let me pour hot lead into water and I'll tell you the price from what I se...or better, let's email the author and ask him for another great random guess...
Has anyone read the paper? I don't quite understand the calculation.
1 - He uses the amount of gold traded per day on the LBMA to estimate the total amount of paper gold traded per year.
2- Then he divides this by the amount of physical created per year.
However, doesn't calculation 1 also include trades where parties are trading between themselves? For example, person A sells 10oz to person B. Then person B sells back 10oz to person A. In this case, there is still only 10oz of gold, but the calculation will include 20oz of gold. This will always result in a huge number.
Am I missing something?
These are net transactions, by my understanding. This means that one contract going from producer all the way to end user is only counted once. If someone buys 10 oz one day, and sells it back to the person he bought it from the next, it is counted as ZERO. If he sells it to someone else, it still totals ten. If he buys ten more, it is counted as twenty total.
Your right the entire futures market are divorced from reality and that is why the entire thing is getting wilder with bigger swings and why ultimately investors will start to demand physical.The fund managers who invest don,t own the investments they manage the investors do and as more investers get windy they are going to wind in their investments and they won,t want inflationary fiat currency they are going to want investments outside of the system as it gets wilder and wilder.Funds and Fund managers don,t care as long as the fee,s are paid and no one bothers as long as they see paper profits regardless of the real cost to the economy.The crunch is going to come when too many investors want out of the system at the same time and prices ultimately collapse when there aren,t enough assets to go round.This is when real assets come into there own for price and lack of quantity.The more thinly the jam is spread the less there is to go around.
Whole western world is divorced from reality, and not just economically.
You crazy kids. Complaining about the fed's voodoo economics then creating your very own branch of it.
Did you notice the other day that gold started spiking above $1200 and the fed forced it down, using their infinite war chest of cash. That's the reality these gold fantasies are up against. Gold will only increase in value like that if the US government collapses.
why is it in what appears to be a bull market then? why not stop gold at 500, 1000...? because they are not all powerful is the answer. if they were wouldn't we have had a self-sustaining recovery by now? answer: yes. continued depression is not in their interest and they know it. continued depression breeds political unrest and that endangers their hegemony. but keep it up; when all are bullish is a crucial part of the end of the price rise.
Jeff,
I am a gold bug and it is central to my portfolio, all physical.
However, I agree with tpbeta, the price manipulation crew have infinite funds, are above the law, and have every central bank on their side. Even the sovereign buyers have a stake in the low price, because they are busy accumulating at source; the mines & intermediaries. They are all happy with the crimex operation.
Something will ultimately bring this to an end. But it won't be the CTFC, the law, or lack of funds.
There will have been reasons for allowing the rise in the gold price, it helps deter the bulk of the sheeple by selling the story of a 'bubble.' A higher price also facilitates roller coaster drops, these shake out many of the weak hands and deter demand.
Where the price would be today without manipulation, who knows. But even Jim Sinclair, supposed gold expert, was confidently predicting $1650 about a month ago, to occur within days 'for sure' based on conferring with major buyers who he has a hotline to, and then the price went down, and he is desperately back-pedalling to save his reputation.
He too seems to have underestimated the power of the manipulators, and is today decrying the corruption in the system that made a mockery of his prediction. The $1650 target is now extended to 'by next year.'
I think that silver is the best hope currently of turning the tide, there is a real supply squeeze there; unlike gold, it is consumed, and CBs don't hold stocks of it.
If an ounce of gold is worth $54K US dollars, and historically an ounce of gold is = to an average man's suit, then in reality the US dollar, and all fiat currency, is worthless. What this is saying is you may have a $52,800 net profit on your 1 ounce gold sale in the future, but you're still only going to purchase a man's suit with it in the end; hardly getting rich but at least you'll hold your purchasing power. The same could be said for other hard assets relative to debt notes (currency); they will have similar purchasing power in a new economy dependent on their necessity at the time, like food and water access, then bullets, weapons, shelter, and good friends. Just like Argentina's most recent collapse, junk silver and bullets were very valuable in their collapsed economy to trade with. Little markets formed where trade occurred through barter in what was valuable at the time. An ounce of gold there might have got you a couple of hand guns and ammo but you surely didn't get you 108 hand guns and ammo (54K USD worth).
in the long run we're all dead. look at american barrick and the price of suits '29 to '36 and see if for perhaps just a while that gold=suit works for gold (as it worked for suits '80 to '02).
But at least I'll preserve my purchasing power to buy a nice suit, or canned food and iodine tablets.
It,s not really what the Gold fantasies are up against its what the fed is up against.A total lack of confidence in the entire system and keeping up a lot of spinning plates at once,sooner or later a plate is going to fall causing more chain reactions,as they repair one thing they destroy several others.The Gold price is ultimately a register of confidence or fear in the financial system.Gold ultimately reflects the current state of financial flight,or would do if it was,t manipulated so much.
Fiat currency has no value,the "confidence" in it is the value.If people do not want it for a transaction it looses value.
How can you compare the price of a suit in the 1930,s,it appears to be a good comparison but look at the increase in population and cash.Take these adjustments into the calculation and you are nearer a true figure.just an observation but more people probably wore a suit in the 30,s.
After debating for a couple years I final decided to take the plunge in 2008 and buy gold and silver. Since then there has been times when I've been down mainly in silver, but I do not regret it at all. That shinny stuff really does work better then sleeping pills.
It comes as no surprise that Adrian Douglas is once again flaunting his ignorance, but it's still disappointing that so many ZH'ers fall for this drivel.
On the off chance that anyone here is interested in a factual debunking of Mr. Douglas and the rest of the charlatans at GATA, you can find it here: http://www.financialsensearchive.com/editorials/townsend/2010/0419.html?...
xPat
The follow-on article also provides some level-headed context on the question of fractional-reserve bullion banking: http://financialsense.com/contributors/erik-townsend/so-you-think-you-ow...
xPat
purpledinoz and goldbricker,
I'm delighted to have found a couple of sound minds here. There are indeed good reasons to prefer physical bullion (see the 2nd article cited above), but they are not the ones GATA emphasizes.
The key to investing in general is to look at people and situations critically, and to figure out who's full of it and who isn't. GATA has thoroughly proven their incompetence over and over again, yet because their cause is so virtuous (in principle anyway), investors just keep on "believing in" the GATA Kool-Aid.
All you have to do is look at the nonsense they were spreading about the 100:1 stuff (first article above) and you can see they either don't understand the markets or they are intentionally misleading people. It really doesn't matter which. The point is that GATA are not credible. Period.
xPat
I agree. GATA are fighting the right battle, but not for entirely the right reasons, IMHO.
I could care less about their complicated formulas, or ancient comparisons to mens suits, or whatever. That's all hypothetical bullshit, for people without a life.
The fact is, gold is undervalued currently, whichever way you approach it. And the reasons for this are unsustainable.
Good posts. Thanks xPat.
+1, this 45:1 ratio is non-sense.
Agreed, Xpat.
I've followed GATA for a decade now, but the truth about their allegations (as well as whether they matter) is still murky. I would never make a gold-buying decision based on what GATA, Butler, CTFC, or LBMA say, unless I knew an insider.
I would rather know what CBs and other official holders are doing. That information is shrouded in secrecy; from the 40-year-non-audited US gold reserves to the recent 380-ton BIS swap, transparency is non-existent. There must be something to hide, and that makes me want gold I can clutch in my sweaty palms.