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Guest Post: Welcome to the Mania!
Submitted by Jeff Clark of Casey Research
Welcome to the Mania!
With gold punching the $1,300 mark, thoughts of what a gold mania will be like crossed my mind. If we're right about the future of precious metals, a gold rush of historic proportions lies ahead of us. Have you thought about how a mania might affect you? Not like this, you haven't…
You log on to your brokerage account for the third time that day and see your precious metal portfolio has doubled from last week. Gold and silver stocks have been screaming upward for weeks. Everyone around you is panicking from runaway inflation and desperate to get their hands on any form of gold or silver. It's exhilarating and frightening in the same breath. Welcome to the mania.
Daily gains of 20% in gold and silver producers become common, even expected. Valuations have been thrown out the window – this is no time for models and charts and analysis. It's not greed; it's survival. Get what you can, while you can. Investors clamor to buy any stock with the word “gold” in its title. Fear of being left behind is palpable.
The shares of junior exploration companies have gone ballistic. They double and triple in days, then double and triple again. Many have already risen ten-fold. You have several up 10,000%. No end is in sight. Your portfolio swells bigger every day. Your life is changing right in front of you at warp speed.
Every business program touts the latest hot gold or silver stock. It's all they can talk about. Headlines blare anything about precious metals, no matter how trivial. Weekly news magazines and talk-radio hosts dispense free stock picks. CNBC and Bloomberg battle to be first with the latest news. Each tick in the price of gold and silver flashes on screen, and interruptions offering the latest prediction seem to happen every fifteen minutes. Breathy reporters yell above the noise on the trade floor about insane volume, and computers that can't keep up. Entire programs are devoted to predicting the next winner. You watch to see if some of your stocks are named. You can't help it.
The only thing growing faster than your portfolio is the number of new “gold experts.” It’s a bull market in bull.
You can feel the crazed mass psychology all around you. Your co-workers know you bought gold some time ago and pepper you with questions seemingly every hour, interrupting your work. They ask if you heard about the latest pick from Fox Business. They want to know where you buy gold, who has the best price, and, by the way, how do I know if my gold is real? They all look at you differently now. Women smile at you in the hallway. You worry someone may follow you home.
Your relatives once teased you but now hound you with questions at family get-togethers – what stocks do you own? What's that gold newsletter telling you? Where can I keep my bullion? You don't want to be the life of the party, but they force it – it's all anyone wants to talk about. Your brother tells you he dumped his broker and is trading full-time. Another relative shoves his account statement in front of you and wants advice. You sense someone will ask for a loan. You don't know what to tell people. The attention is discomforting, and you feel the urge to escape.
At first it was exciting, then breathtaking. Now it's scary. You're drowning in obscene profits but are becoming increasingly anxious about how long it can last. Worry replaces excitement. You don't know if you should sell or hold on. Nobody knows what to do. But the next day, your portfolio screams higher and you feel overwhelmed once again.
You grab the local paper and read the town's bullion shop had a break-in last night. They hired a security company and have posted several guards outside and inside the store. Premiums have skyrocketed, but lines still form every day. The proprietor hands out tickets when locals arrive: your number will be called when it's your turn… the wait will be long… please have your order ready… yesterday we ran out of stock at 11am.
You begin to worry about the security of your own stash of bullion – those clever hiding spots don't feel quite as secure as you first thought they'd be. Is the bank safe deposit box really secure? Shouldn't they hire a security guard? Should I move some of it elsewhere? Is there anywhere truly safe? You find yourself checking gun prices online.
And it's all happening because the dollar is crashing and inflation has scourged every part of life. You curse at those who said this couldn't happen and mock past assurances from government. Cash is a hot potato, and spending it before it loses more purchasing power is a daily priority. Everyone is clamoring to get something that can't lose value, but mostly gold and silver.
Your wife calls and says the $100 you gave her that morning isn't enough to buy groceries for dinner. Prices change often on everything. She urges you to get some bread and milk before the stores raises the price again. You suddenly remember you're low on gas and make plans to leave work early to beat others to the filling station. Restaurants and small businesses post prices on a chalkboard and update them throughout the day. Employers scramble to work out an "inflation adjustment" for salaries.
On your way home, the radio broadcaster reports the government has convened an emergency summit of all heads of state. They're working urgently on the problem, and all other agendas have been tabled. Outside experts have been called in. We're going to solve this rampant flood of inflation for the American people, they say. In your gut you know there's nothing they can do.
You change the channel and hear about the spike in arrests of U.S. citizens at the Canadian border. Scads of people are caught trying to sneak bullion and stock certificates out of the country – from airports to rail stations. Violence at borders has escalated, and stories of bloodshed are getting common. The White House ordered heightened security at all U.S. borders, with the media reporting it can take days to cross. Foreign governments offer meaningless help, others mock U.S. leaders for their shortsightedness. Their countries are suffering, too.
You think about the gains in your portfolio and wince at the taxes you'll pay when you sell. Nothing has been indexed to inflation, so everyone has been pushed into higher tax brackets. Citizens are furious with government. Agencies have been swarmed with bitter taxpayers and revolting benefit recipients. One government office was set on fire. A riot erupted in Washington, D.C. last week and martial law was temporarily declared. It's too dangerous to travel anywhere.
As crazy as things are, it's hard not to smile. You're in the middle of a mania. Your life has changed permanently. You're part of the new rich. You can quit work, live off your investments. Your wife is ecstatic, and you both feel as if it’s your second honeymoon. Your kids are amazed and gaze at you with the same awe they did when they were children.
You're thankful you bought gold and silver before the mania, along with precious metal stocks. You daydream of where you might go, what you might buy. New options open up daily. You realize you'll need to meet with your accountant, maybe hire a second one to protect your sudden wealth. You wonder what you'll invest in next. You ponder what charities are worthwhile. Better meet with the attorney to redraft the will.
As night settles and your house quiets, you log on to your brokerage account one last time. Even though you're ready for it, your mouth drops when you see your account balance. It is truly overwhelming. You think of others who own gold and silver stocks and wonder if any have sold yet. Has Doug Casey exited?
You stare at the blinking screen, hand on the mouse, the cursor hovering on the sell button…
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5K by February 2011
http://www.munknee.com/2010/09/5000-gold-bandwagon-now-includes-these-62...
Gold to 55k after paper / physical prices diverge and after "Robert Prechter's 15 Minutes of Fame".
The Shoeshine Boy -- fofoa.blogspot.com
...
Av. Benavides 5495, Oracle!
FOFOA FTW!
I have given most of my silver away and it feels great. I am almost broke and have done it all myself. I am the only one i know of to whom poverty is precious. My days as a hobo have taught me well the real values we posess as beings in these temporary frames. I have a nice garden and home and food stored. The only thing of value i kept besides my integrety and self respect is a few silvers should i ever need them.
I got nuthen and nuthen got me
I got nuthen and thats why i am free.
To all you folks i may appear nuts, several hundred folks in my city wonder about me. I think it was a good move and hope some of them are encouraged to be curious. For me the path of poverty has brought me in tune to the spirit and the recent years in business have sucked me deeper into the illusion. Now there is not such a struggle and need to be so human to make my way.
All my ego fought me to retain what was one of the nicer trucks in town. The man in me wanted so to keep it, my heart said sell. I am almost a bum now and entirely by choice and i take no government hand out. Nor will I.
yes i know value....being fully alive ..this moment..thats real value
time is short, then gone and entirely unappreciated until too late.
Love helps being fully alive. Got plenty
Looks like you have a head start on the rest of us. Keep a light on. God Bless...
http://www.youtube.com/watch?v=Yh-QWKGbm2Q
Good for you merehuman! I have not nearly reached that point, it is doubtful I will.
I do understand, however, the Power of Giving. A friend of mine and I were talking not long ago about giving away money to beggars. I told him that if my wife is not around that I will give change, maybe a buck or two depending. My friend then offered up a notion that while "we" may feel a little better about giving out a buck or two, why not make the beggar happy, giving him a twenty! A few days later I had suitable opportunity: there is a guy whose "turf" is our town's 7-11. I gave him a twenty, and it did indeed light him up!
Having things is a burden. But, unlike you, have never had NOTHING, that would be a big step.
I do share one thing item with you, there is Love around me too.
Sounds like you are living more or less the Power of Now (E. Tolle).
The Bearing lives in a condo and so cannot have a garden.
well the house and garden is not mine either, sold for 10 dollars to my older partner. I do not know of E Tolle, but yes , now , always and only. The dying daily they speak of indeed must be a daily. I am not yet sufficiently dead yet. lol . Dochen , you also live, work and save with more than yourself in mind.
Adventure is heating up a bit.
Been there, done that.
giving a beggar a twenty, or a c-note, is a lot of fun
(if you don't get arrested ....)
However, just beware of the golden rule:
If you feed pigeons,
the consequences are that that it makes more pigeons!
Daffy,
Having strength means you can help other people. Hippy love is a dime a dozen until the drugs run out, or the food.
Merehuman, ever read this?: http://www.amazon.com/Voluntary-Simplicity-Outwardly-Inwardly-Revised/dp...
How do you pay your property taxes?
What a bunch of crap. Now you and your family are just another loser on the government dole.
Gold 36,000
a plethora of pontificators.
Not sure what this article has to do specifically with Eric Sprott or Sprott Asset Management, but since he's been tagged to this article, I will post here. Jesse put out an interesting piece today that shows the disconnect between PHYS shares and the price of gold, particularly after one of Sprott's notorious dilutive Follow-On Offerings. Maybe investors are getting the message after the most recent offering. They're not jumping back in to the fund. The two other Canadian bullion funds, CEF and GTU, currently have greater Premium to NAV than PHYS -- presumably because the Spicer family (CEF & GTU founder/managers) don't make a habit of screwing their investors on a regular basis.
You'll have to go to the link below to see Jesse's charts and graphs. Revealing stuff.
Jesse -- As a PHYS investor, I want to thank you for highlighting this issue.
======
30 September 2010
Net Asset Value of Certain Precious Metal Trusts and Funds and the Odd Performance of PHYSI am finding this contraction in the premiums of the gold trusts to be extremely interesting. Both followed an expansion of the fund's units and large sales of overallocations to the underwriters, providing liquidity not only to expand the trust but also to game the shares.
This expansion facilitates an arbitrage on the premium in which one sells the trust and buys GLD for example. And the holding of units by the underwriters assures a ready supply of shares for shorting, if one assumes that the big punters even bother with the nicety of borrowing shares.
While the premiums remain uniform it does not matter since the NAV will track the bullion holdings, but it does create a sort of retrograde phenomenon in which the funds will briefly underperform bullion due to the contraction of their premium, especially in the case of PHYS, from the lofty 8% to the lowly 2%. It will be interesting to see if this holds, or if the range of premium reasserts on a new leg up in bullion, and the 'kick' of a possible short squeeze.
Who can say? As Robbie Burns once observed:
But, Mousie, thou art no thy lane,
In proving foresight may be vain;
The best-laid schemes o' mice an 'men
Gang aft agley,
An' lea'e us nought but grief an' pain,
For promis'd joy!
Still thou art blest, compar'd wi' me
The present only toucheth thee:
But, Och! I backward cast my e'e.
On prospects drear!
An' forward, tho' I canna see,
I guess an' fear!
[SEE CHART & GRAPHS AT LINK]
You may wish to keep this in mind if and when Mr. Sprott introduces his Physical Silver Trust.
Here is what the NAVs looked like in early September 2010.
Posted by Jesse
http://jessescrossroadscafe.blogspot.com/2010/09/net-asset-value-of-certain-precious_30.html
The offering was not dilutive. The gold oz. per unit was .00823 before and .00843 after the offering( the NAV is the NAV!). The perception that this was dilutive is why the premium is so low right now. I think Jesse could have explained it better than being so "cryptic". If you look at CEF, it's premium is also half of a few weeks ago. I think that for an IRA these funds are the best way to own real gold. Closed ends can trade at discounts (and big premiums during a mania)..
indeed.
if you look at CEF's prospectus, they're allowed to use that premium to acquire more metal every 90 days. sometimes they do. if you hold CEF, you see a drop in the price/NAV when they announce, then it just fades back up. same with GTU, their gold-based offering.
long-term, it doesn't seem to matter much. short term, you can really get burned if you have to buy/sell at a given time that coincides with their offerings.
i'm assuming the PHYS has the same model.
i would also bet that somewhere in those transitions, somebody is making some pretty good money.
they (CEF) are much more specific about their 'holding the metal', but i still wonder if it's really there. maybe it's kept in ft knox...
The only way to own real gold is to own real gold. Belief that one can take delivery of gold from a fund when governments under duress are liable to make any number of caprious decisions is foolish.
Physical is the safe way to proceed now. With more QE, trade barriers and currency controls in the offing, why get out on a limb when it's unneccessary?
Just sayin...
I own CEF and recall two good "screwings", in the sense of a share offering that markedly reduced the premium to NAV. However, it didn't take that long for the premium to recover.
Mania... coming to a town near you:
http://money.cnn.com/2010/10/01/news/companies/gold_atms/index.htm?hpt=Mid
Seriously though, what idiot thought you needed a passport to get gold? Cresting, but not peaking yet...
Duplicate
"The road will seem so straight and fair to travel that you will kick yourself for stumbling through the brambles for so long, and wonder at your neighbors who still can't see the path, though truly it is a freeway." FOFOA
Can you provide a link to that FOFOA article? Thanks!
It's still got 50 more bucks to get through before it starts losing containment. Though I expect to see 3 to 4k platinum and 65 dollar silver before gold gets maniacal.
First we had tungsten gold.........
Now we have lead silver..........
Guess I won't be buying anymore 5K ouncers, lol
But for me this is bullish if people are going to the trouble, I'm definitely not trying to scare anyone off stacking, silver is easier to test
http://about.ag/LeadFilledType2.htm
http://www.infowars.com/silver-shines-as-an-economic-solution/
At least its an attempted solution. This guy gets props, the last politician that tried to create a competing currency got a Dealey Plaza haircut.
I bought some UUP today and am considering selling CEF and some SLV.
Could be a good play as there are gaps "above" in UUP to fill. Only question is how long...I'd hold on to the CEF and look to add on weakness (like now with premiums near 3%)...
Hello Jason
Thanks for the update on what you traded today.
All I did was wash my car and do some laundry.
I'll probably eat some chicken fingers for dinner.
Don't be so modest. Obama shake-n-baked more Muslims today and you helped!
Lol. I sold some gold.
That's too bad...
It never feels good trading metal for paper, but my debts are denominated in the currency that I just received, having rung the cash register into price strength. Hopefully I'll be back on the buy during the next bout of price weakness.
Just like the various countries exchanging their currencies for petrodollars so they can buy fuel, I must exchange real money for funny money to pay the banksters........ :(
Understood. Use GLD/SLV to trade, but try to hold your physical if you can. As always, bills come first...take care...
+++++++ LOL
And all I got was a subscription to the Jello of the Month Club.
I'm a little constipated myself. Must be the cheese burrito.
+ lol'd
the cursor hovering on the sell button…
Is this marketing material from Rossland Capital?
Watch out, folks... remember Dow 36,000...
I remember 1980
Each to his own. Everyone should hold a little gold.
Let me ask you a question if you are willing...
1) if you had to close all gold futures but retain commodity exposure, what is relatively cheap now?
Just to make challenging, don't say silver.
Silver???!!!
Natural Gas.
I have natural gas..most of the time...
Food, and lots of it. Somebody has to feed the unprepared! Food, like silver is cheap to us right now but it aint gonna stay that way.
food is silly cheap now when priced in glod.
Costco is running a special of regular USD1000 for USD800 on what they call a year's wprth of food for one. That comes out to 0.6116 ounce, or about USD160 as of ten years ago. Anyone in their right mind would buy the food(free shipping) before buying a single Krand. To push it up to a full ounce Krand you can add freeze dried meats and extra vegetables.
If TSHTF your gal will be happier with you if she has something to eat without waiting in line for gombit cheese.
Yeah, gold is way high in purchasing power in regard to your most basic needs.
FWIW, I allocated six ounces to grabbing a fallback for my employees.
The link:
http://www.costco.com/Browse/Product.aspx?Prodid=11487214&Ne=4000000&eCa...|3605|75277&N=4040913&Mo=24&No=0&Nr=P_CatalogName:BC&cat=75277&Ns=P_Price|1||P_SignDesc1&lang=en-US&Sp=C
If the author of this article is close to being correct regarding the mayhem which will ensue, you may want to adjust your investment priorities to solve other issues this scenario creates.
Water, food (stored, plus ability to grow and prepare), first aid (including dental), shelter (including heat) and the means to defend the items you have acquired. After taking care of those items, you may want to consider some gold, silver, etc...
If you dismiss this list thinking that with some gold I can buy all these items in a post rule of law collapse, then you are no different than the thug who thinks he can get your gold and silver (and everything else he needs) with an AK47.
Coal, Natural Gas and Oil
Pork Bellies Bitchez!
$140 again, by Jan.
http://finviz.com/futures_charts.ashx?t=PB&p=w1
natural gas, sugar, coffee and cocoa.
Uranium
Me too, not much debt back then. Man, how times change. 30 yr. bonds at 3% yield..who wouldda thought...
Wasn't that a Prechter prediction back when Rukeyser was alive?
All that pimping for a goldbug gala? I'll still buy 30-40$ US junk silver a month...nothing happens the kids get it all! Keep some perspective on the madness
Bingo! If what he's describing happens, do we want to be here??
Where else ya gonna be?
The same place all the high end doctors are going-Belize...
Hmmm, Belize will be the next place to hunt down "terrorists".
You're right. Guess I'll just stay and fight it out if things implode...
high end doctors
The kind of doctor you raise your rump for? I hope your grip isn't too firm.
Especially proctologists! I read a piece about how many "specialists" were moving their practice offshore to avoid the Obamacare net. Belize seems to be a favorite...
Talking about proctologists, one of my best golf buds is a proctologist and he's invented a new golf grip patterened off of the feel of a big one with corn in it.
Belize my ass.
Proctologists are all fucking crazy. "Hi, my name is Knucks and I'm a high end proctologist." See, makes no sense whatsoever. I mean, WTF are ya' gonna talk to this dude about? Golf grips? Shafts?
Must be something relates to this in the Sermon on the Mount, but I can't seem put my hands about it.
You might want to consider buying some nickles. Melt is slightly above face value right now. The value of industrial metals does depend upon their still being some industrial demand. However, consider that when govts. have had to add a zero to the currency, they have not fooled with the coinage. A nickle will still very likely be worth 5% of the New Dollar as they are expensive to replace. So the nickels give a double form of hedge. Moderate inflation with continuing industrial demand and melt goes up. Hyper inflation and New Dollars and a nickel is still worth 5% of the new bill.
Another route for having some of the new "in demand" currency would be to purchase some .223 and .308 and put it away. Likely to have a very attractive barter price, IMHO.
Yes I have to agree - holding gold thru a hyperinflation will also demand holding lead, possibly grains and lots of water storage. A generator is also a good option. The last two items come built into your average motorhome and they're getting super cheap these days......
A reloader, dies and bullet molds for most popular calibers, a stock of multi-purpose powders and the 5 sizes of primers and you are all set - your "customers" will bring the lead and empty brass....
The most valuable guy in the neighborhood!
Junk silver, where do you find this, if not top secret information?
Thank you
Ebay. 90% silver coins- quarter/half dollar rolls...
Monex; and google it; there are various sellers usually bags of used coin. Execellent value; it always amazes me that there's any left, but there is.
Apmex.com will sell ya old silver coins.
Fascinating. An entire article attempting to characterize me as a gold investor, and not a single word of it actually applies to me.
What an utter waste of Internet bandwidth.
Agreed. Casey "research" did nothing of the sort in this hysterical pos.
Count me in. It was greed that got us here, as I recall.
wot me? no,no, I sold it months ago...
Would you like a nice bottle of rum?
haha I love this story.
Kind of speculative, gold was down $20 at the opening in NY.
Gold shares have had a decent run up in the last couple of weeks but the 'nervous Nellies' are still selling at every dip. Must be expecting a crash.
AUD,
Yeah, and in 10 minutes the LONGS have jumped all over it and it's back to where it was or higher.
6 months ago the PLAYAS could pull this crap, and knock $20.00 off for the day.
They have lost control, the markets LONGS/Bulls are not giving an inch.
This has to be very disconerting to the assholes that are used to pushing all of us around.
ONE thing that IS pissing me off, is our OWN starting to eat each other(Nadlerites).
I am sick of hearing,and reading the same Guru's that have been PUSHERS for the last two years, all of a sudden having an epiphany........
Saying they are disconcerted, and worried because all they see is 24/7 ads for Gold at the highest prices it's ever seen.
Well, so what?.
It's different this time,( and for once, it IS different!) and newsflash, IMHO we are in way more trouble fiscally, and globally now than in '08.
Remember when it took 6 mos to get delivery?.Not one time in the past 18 mos have I had to wait for a shortage of product.
So, your telling me the mania phase is in FULL force, I call BS.Not even CLOSE. Jim Sinclair, and Doug Casey know a mania, and this ain't it.
But, if enough of our FRIENDS in the biz keep this negative shit flying, folks will start dumping their core holdings, and double screwing us and themselves.
Only to look back in 12-14 months to find their ass dead broke.
With hands full of dirty FRNs.
For what it's worth, 'paper gold' spreads on COMEX are looking pretty healthy. I wondering if the dumb money isn't following the 'get rich quick' thing at the moment.
That's a good point - where were all these price chasers two months ago @ $1160?
Price "chasers" come out at the highs...
......When I ring the cash register. ;)
Exactly! But for what? Thats the dilemma no one has adequately addressed yet...
Paper profits that I put back into hard assets on price weakness.
+ $1300 DosZap
NONE of our problems have been solved.
Deficit? Debt? Obamacare (a new problem)? Higher taxes?!?! A quick Cap & Trade perhaps in the lame-duck Congress after Nov. 2? QE2?
Anyone not scared to death now does not have a functioning brain.
Thank you for your help. Ah so thats why i am not scared. DoChen, life is an adventure to me. I almost died several times.
drowned twice ,1st time some one yanked me up at the last second from the whirlpool in sacramento river I was 15. a few months later out on a leaky rowboat it went out from under me. I learned to swim that night.
Jumped head first into the deep end of an empty swimming pool. I was 6, in germany orphanage and suicidal. At 11 with a foster family i plugged myself in to the electric box. Fuses blown and my butt beat for it.
As a white guy, running a mexican crew in watts. They pulled too soon and the wall slammed me down, fell on me. Everyone thought i was dead, including me since i was looking at my body . From outside of it.
I best stop as it sure diverges from the topic. Live, baby live!
Well, OK, merehuman, in your case I withdraw my remark.
I really enjoy getting insight from some of my virtual friends on the 'Net. Indeed you have had an interesting life, many adventures, most of which I would not have enjoyed...
Shine on! You, sir, are a light.
Thank you.
I have been watching specifically for gold ads on TV during shows like Wheel of Fortune (none), Jeopardy (none), talk shows (Ellen and Oprah) none, sports (none), local or national news or weather (none); where I do see them primarily are financal channels. I have also heard they are on talk radio, conservative radio I'd reckon, but I'd wager there aren't any on top 40 pop stations.
When ads start appearing on more common venues then mania is approaching. Until then it may be annonying only because you are in the demo audience for "buyers" so get used to it.
Temp,
I have to ask myself how many people do I personally know buying gold. The answer is still just a chosen few. During conversations people still don't realize the train wreck lying just ahead. My sense is gold is far from fair value considering all the debt created by these maniacs, all the money printing by these maniacs, all the bailouts and stimulus by these maniacs, and all the toxic derivatives created by these maniacs. God help us all.
I see the mania phase full of desperation, riots, hunger, economic disaster and a government gone wild trying to control the run away PM prices. The news media will demonize gold and silver and in fact claim foreign powers and agents were behind the bubble price explosion of PM's and how it was used to destabilize the almighty dollar.
I think the end has cometh and the rats are abandoning the ship.
Good luck!
I only know two. Everyone else always asks "what is gold going for now?". They should be asking "what's the dollar going for now?"
Woin't none on Joisee Showre, nedeah.
What I have seen recently in Australia (where the POG increase has been constrained by FOREX moves) is a preponderance of "we will buy your gold" temporary stalls in shopping malls, and radio ads for the pay-day vultures and pawn-brokers who will now buy your gold. It is a good way for me to acquire 1oz coins at a very small premium compared with the official dealers!
There is no-one as yet casting a line towards a potential "buyer". No-one. This bull has a fair bit of paddock to have a run on..... once we see focussed selling to "investors", and no doubt a daisy-chain of gold derivatives, then we know that things are getting exciting.
In my small town (25K), we went from no "Cash for Gold" places to six in two years. Now all the jewelery stores are joining the game, too. From what I have gathered they work on 20-50% margins to spot gold prices. The state of AZ is getting involved trying to regulate these guys. Seems that state inspectors have found a bunch of them operating with scales that are off in the gold buyers favor.
There is no mania. The banks would love to temper the realization of FRN accountability, but for those that pay attention- it isn't going away.
No one I know buys gold and if they do, they aren't talking about it. This is not the nature of "mania".
The author of this article fails to rein in his enthusiasm- what is his new found wealth denominated in? Gold protects your wealth, but it never increases it. I will never be wealthy with gold and silver. I will only have managed to keep what wealth I have accumulated. While others will be the poorer. Relative wealth in a society with a reduced standard of living is not my idea of being wealthy.
Being wealthy in a society of growing wealth, now that is something to be a part of- unfortunately, we will never be that again.
time to sell gold
This is "research"?
No, it's a description of a gold mania-kinda like the dotcoms but bigger (no fever like gold fever). Problem is, what do you sell your gold for, and do you want to experience marshall law and anarchy....
I will trade it for good farmland, since I already have enough lead to defend it.
And farmland is still cheap! Well, at least in Oklahoma. But then, everything is cheap in OK. Lot's of bad weather...
Are you willing to shoot the tax collector?
Martial law.
I been thru Marital Law once, she was a bitch.
Took me for eva thang I had.
That right there was funny.. Spit my bourbon out..
Tyler, unless Casey is paying you a lot of money, IMO you should not post this garbage. Leave it for Kitco.
Unfortunately fed is creating the mania. By refusing to allow values to stand and melting market back up they change the dow gold parity. Gold hit 800 in 80's when dow was in the shit can at 841. Show me dow 6000 or dow 5000 or dow 2500 before I'm willing to even ENTERTAIN that this kind of blow up won't happen.
The more denial, the better I feel that there is no gold bubble...
You don't have a bubble when they have to suppress it with a 100-to-1 paper-to-physical Ponzi scheme only to see it still growing by 400+% in the last decade. It's more like a smarta$$ sitting his butt on top of a volcano thinking he can suppress the eruption.
Gonna end ugly.
Afraid So...
Goldilocks apocalypse scenario.
Not too orderly, not too chaotic. "Just right" for those who bought gold.
Yeah, right. Tell me another one.
[Nota bene for the flamers - I'm invested in gold too, but I sure as sh*t ain't countin' on no "goldilocks" scenario]
+1300
That was painful... at least when the Mogambo talks about smiling college girls, it's tongue in cheek.
Apocalypse scenario...results will vary wildly. I was in DC in 68 when riots erupted. One block would be ablaze while the adjacent block had kids in the street playing stick ball.
Army had sand bagged .50 Cal machine guns set up on all access points to DC. No one got in or out unless they had a very good reason and paper work to back up their reason.
I lived in Annapolis at the time, 27 miles from DC...at night the fires in DC made a very bright glow on the horizon.
No riots occured in any adjacent towns except a few smaller outbreaks in Baltimore.
What we experience will depend on where we live and work. TSHTF scenario usually starts in the big inner city areas...I can't see riots breaking out in a small Nebraska farming community...not saying it couldn't happen...but it seems unlikely to me.
Gold still needs to trade back down to $1000 before moving significantly higher. Way too much optimism in gold land.
Cheap post.
Hey, I like arbitrary numbers in imaginary units of value too. The dollar will be worth 100 euros before it goes to 1/100th of a euro.
My gold and silver will have increasing purchasing power going forward. That's all there is to it.
+ $1300 and counting...
DoChen,
Please come up with the correct ratio of roller bearings to an ounce of gold. This could be very telling. I suspect some detail will be necessary such as size, grade of steel, and heat treatment if any to standarize the comparison. Might even be fun!!
OK, living, my best quick shot:
We sell mostly automotive replacement bearings, which are NOT very precision made (like aircraft bearings, hard disc drive bearings, dental tool bearings, etc.).
Also there are lots of different kinds, some with housings, some only made by one or two companies.
But, of the kind we deal in I would say that our typical bearings would price out around $1.00 - $2.00 per ounce.
So, roughly, 1 oz Au = 1000 oz bearing weight.
This may be more important than the gold/silver ratio LOL.
Reason and logic..love it!! Ever consider running for office??
Ya, I'd rather place my bets on overwhelming debt being resolved...
It's all about debt. Can we pay it back? Odds at this point are...nill..
"Paper" gold still has to hit ZERO - don't forget. And where will you buy "Real" gold with it's "paper" value is only 1 cent? NOWHERE. Same goes for "Paper" gold at $1,000. Nobody will sell for that cheap!
You can find these stories all over the erotica sites on the net. Just substitute "gold" for "hot wife". Clean up when you are finished.
As long as currencies are being euthanised, PMs and gold will do well. Gold is the new Google.
Gold is the new GOOG, but without earnings.
Look at the S/P valued in gold vs. paper.. eye opening...
Yeah. I think everyone in gold is well aware that when gold goes ballistic they will have preserved the value of their currency...not gotten rich.... big difference, and not fun. Could really do without this kind of crap
I agree. How could this ever happen?
Depends on how much Gold you own, and how much fiat you had......
You could easily wind up filthy rich, or dead broke,or somehwere in the middle.
Thats not really true roy. If you have 100 ounces, says, and gold goes to 10,000 USD/oz, while you will not then have 1 MM in 2010 dollars, you also wont have 130,000 USD in 2010 dollars. It will be somewhere in between. When i do these calculations and project forward, i usually use the rule of thumb to just subtract 50%, of what the nominal price of gold is saying. So in the scenario i just said, i think youd have 500K in 2010 dollars. You will be doing more than preserving wealth, because gold is way undervalued now, and dollars are way overvalued by the market. Yes strictlly speaking, you will just be preserving your wealth, but then you should say "preserving your wealth amidst a sizable deflation in a large number of consumer goods" (albeit not all consumer goods).
Yeah. I think everyone in gold is well aware that when gold goes ballistic they will have preserved value...not gotten rich.... big difference, and not fun. Could really do without this kind of crap
I think the part about the starving peasants, looters, etc was left out intentionally.....
Bingo. Cigarettes, liquor, food, clean water, fuel, medicine, shelter, and PROTECTION are all going to be more important than money. This goes for the holders of gold, as well. We already know what experienced criminals will do for money (check out the situation in Mexico for a hint).......
+1000
So many "pundits" have been calling a top in gold on an almost daily basis for 4 years. Nothing changes. But that's because they fundamentally don't get gold. Here's why;
Gold is not a stock. Nor is it really a commodity. The closest label one can give it is a currency/commodity hybrid. However it differs from pure currencies and commodities in how it behaves.
The current rise in gold priced in dollars is simply a function of dollar devaluation. Over the last 40 years gold has increased in value 40X simply as a result of the switch to money printing. debt and inflation as a substitute for real growth in the US economy. Note that during that time the Dow Jones Index has only increased 10X, and only by the good graces of the Fed's stick save from the near-death experience in 2008-9. Gold didn't need or receive any such help.
You can bet your life that dollar devaluation will continue into the foreseeable future. The only open question is will the devaluation accelerate. People who understand this are using gold to preserve their crumbling buying power. Because at the heart of it, dollars that you earn ultimately have to be used to buy "stuff". If the cost of that "stuff" in dollars increases by 40% in a year (as grains have), then anything but gold will suck as an investment or even a place to park extra cash. Nothing can remotely keep up with that in virtually linear fashion other than gold. Yield on even junk debt doesn't touch it and isn't liquid. Yield on stocks is a loser, and not risk free.
Big investors haven't even begun to factor in the potential for real inflation because the reports from the Fed claim we don't have any. And we're only just beginning to factor in the risk of currency and trade wars, which make currency investments and carry trades risky. And we're no where near accounting for any real global tensions which could send gold soaring.
Gold is important to own for a several reasons. As Caviar points out, it is a hedge against .gov debasing our currency.
Even in the 1980s almost all money managers thought it was perfectly OK to have 5% - 10% of your assets in gold.
Disclosure: 7% in gold. As money comes in, I will buy more.
...
If the brilliant FOFOA is right, any of you who do NOT own gold are going to miss out on something big. And you will be very sorry.
80% PM's and 20% agriculture.
80% PM's and 20% agriculture.
It is true, as the article points out, the regular folks will not get into gold until it starts to soar in price. They do not see gold as anything other than another form of jewelry -- like jewelry in its raw form. Not understanding gold as a currency, they will accept the implied opinion of others as to gold's value. Herd mentality at its best. Only those who really understand what gold means will be in front of the stampede, and they will also be the ones who will know when to sell at its near peak. The mass of people will ride the runaway train right into the washed out ravine.
Hey, keep going!! All social order will be breaking down at this point and if you own gold, you might as well have a bullseye on your back. I think you might want to diversify into guns, bullets, and food.
We are all thru if it get to this, and your gold will be as worthless as your dollars.
Not if you can get out of the country. Don't want to be here if it gets that bad...
I got out last summer.
This post is the worst kind of hypocrisy. The premise of owning gold is to retain your wealth, not to get swept into a mania and fantasize about becoming part of the rich aristocrats who helped foster a debasement of the currency to begin with. Most gold enthusiasts on this site view it as an alternative currency, as protection against the reckless whims of government. So to pepper peoples thoughts with dreams of riches in the face of a collapsing society is almost an insult.
I agree. The last thing we want is a "mania" as it would be the end of civilization as we know it. The thing is, the way we are going could make this nightmare come true. If we get to a point of anarchy, what's your gold really worth? If you have to protect your property with firepower, is it worth it? My gut tells me that we are on a collision course with our worst nightmare, "Argentina"?
Capitalism is the fullest expression of anarchism, and anarchism is the fullest expression of capitalism. Not only are they compatible, but you can't really have one without the other. True anarchism will be capitalism, and true capitalism will be anarchism. -- Murray Rothbard
Yep. I want to be a wealthy as possible so that I can invest as much as possible in as many enterprises as possible to do the most good possible for mankind. That is the secret to wealth - investing in what mankind really needs just as James Dines says.
Rick,
I think he's making a point for those intelligent enough to have not followed the Pied Piper.
I took it as a tounge in cheek Walter Mitty type tale.
That unfortunately may come to pass......and WHICH side you want to be on?.
Jim Sinclair said when we start getting close to the mania phase(Stage III) do not be spooked by 100-300.00+ swings a DAY in the prices.
He's been there,done it.
I agree, it is written tongue-in-cheek, but what ZH left out of this post was the disclaimer at the bottom:
"We can't promise the gold mania will be exactly like Jeff outlines, but we're convinced one is coming for all things gold and silver. And to be prepared for the coming events, you’d do well to listen to those experts who have predicted the quagmire the financial system now finds itself in long before it happened. An all-star cast including John Hathaway of Tocqueville Gold Fund fame… Eric Sprott, Sprott Asset Management… Richard Russell of the Dow Theory Letters… and many more."
These guys are selling an idea, one which may very well come to fruition, but their using fantastic tales of untold riches to do it. Even if it is meant to be taken as a parable, they've planted the seed of greed and of luxurious lifestyles in potential investors minds. Focus on the facts rather then trying to appeal the lowest common denominator in the human spirit... Otherwise it really makes you no different than the bankers and politicians who helped sink us into this mess.
Well Said...
DosZap,
He's been there,done it.
I agree the gyrations and price swings will be unprecedented. What is coming is a dissaster beyond belief. Jim Sinclair recognized the situation early and continues to try to warn all that will listen.
But then you notice the alert message telling you about an important announcement. Your account has been frozen by the US Treasury's FINCEN pending its clearance of your proposed transactions. Once that has been cleared, you will only be allowed to cash out your holdings net of a 39% backup withholding tax, and you will only be permitted to transfer your proceeds to another qualifying onshore US financial institution or with Treasury Direct. They will also have exit-tax restrictions. But that is OK, becuase you don't use cash any more since the IRS insisted that your employer directly deposit your wages directly with Treasury Direct, and you use your government issued debit card to spend the net proceeds as calculated by the IRS. You may as well live in a cage.