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Guest Post: Yves On Gold Panic
Submitted by Planet Yelnick
I don't follow gold much, not being a goldbug and finding a lot of the gold commentary at the fringe of financial sensibility. And the ads for buying gold on talk radio are almost as annoying as the Technorati 'teeth' ads you see on a lot of low-traffic web/blog sites.
Sure, a return to a gold-back currency would right a lot of what is wrong with the economic ship of state, but it is not in the cards right now, despite a push by China and the BRIC nations for it, and the rumors of a November deadline looming for China to continue to buy Treasuries. (If I were Bernanke, I would call their bluff on that.)
But sometimes gold as a trade gets interesting, and we may be at such a moment. Yves sent me the attached chart with a few comments. His fundamental view is gold should drop due to deflation. If you doubt deflation is with us, check out the second chart in this recent post.
Yves' chart suggests a wave 3 UP is upon us, gold having run up a bit already today. Similarly, the Prechter view is a serious drop in gold as deflation picks up, but their wave count also suggest an UP wave right now. The STU on Monday showed a chart of an ABC correction in gold with an alt count of ending a triangle B wave, and now starting a sharp spike up in wave C. A break of $972 confirms that gold will run fast towards $1050-1100/oz. We got to $955 spot today, but over $978 in Dec gold futures. Neely has had his aggressive traders in gold, and is now lightening up a bit, but also expects the run to continue in a gold panic, a "feeding frenzy" as the goldbugs rush in to avoid missing the big move.
(Note: in markets, there is not fear and greed, only fear; greed is fear of falling behind. A buying panic is a moment of fear.)
Now, normally the USD and Gold are inversely related, and the USD has been in a bottoming process rather than a fall, with an upwards bias; yet gold is spiking. Question is where is it coming from? Sentiment for gold remains essentially neutral.
Let me speculate that it is coming out of Asia. The China Bubble has burst and the SSEE is down around 25% in a month, with apparently more to go (at least below 2000 if not down to 1000, where the parabolic rise began). The Chinese government has been buying gold for the past six months (at least), and I suspect the middle class in China is rushing in for a safe haven against the equities collapse and likely real estate crash to follow. The recent rise in Copper may also have the same roots, of China rolling its long-term Treasuries into shorter terms, and then stockpiling commodities, including gold.
Whatever the cause, the wave structure is predicting a gold buying panic that will drive gold over $1000. Watch and see if it is correctly gauging the psychology of a buying panic.
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"finding a lot of the gold commentary at the fringe of financial sensibility"
Like Peter Schiff in 2006 calling for a housing crash? that kind of fringe? How many laughed at him?
I don't follow waves much, not being a wavebug and finding a lot of the wave commentary at the fringe of financial sensibility.
It's an A of a B of a 123 impulse down. LOL.
+10
+100
Lots of people saw the housing crash coming at that point - Peter Schiff was hardly a genius for making that call.
Meanwhile, he was completely and totally wrong about Euriope and Japan. He thought the US alone would tank, decoupling from the rest of the world.
A lot of gold commentary on the internet is at the fringe and pretty far off from what any actual economist will tell you about gold.
"any actual economist"
You mean the same "economists" who are now blathering that a $9 Trillion Deficit is nothing and is even necessary for economic revival (ala Krugman); you mean the same "economists" who are now spouting such NONSENSE as "jobless recovery"; you mean the same "economists" who will put their stamp of approval on FAKE and FUDGED economic data just because the govt. is paying them to do so. No Thank You. I'll take the "fringe commentary" ANY DAY over what the "actual economists" are blabbering about.
"Lots of people saw the housing crash coming at that point - Peter Schiff was hardly a genius for making that call."
Yeah well, I didn't see any of those "lots of people" put their ass on the line and come on TV and publicly stake a position, and in the process warning a lot of mainstream public well in advance.
+10
Bottom line:
Stocks can go to a value of zero. It is paper backed by a corporation and the assets of such corporation.
Gold cannot, and will not, have a value of zero, assuming SOMEONE will always have a need for gold.
stocks = zero means no capitalism and someone probably has you at gun point and is stealing your gold from you anyway. make that bet if you want, many are. but consider if you're wrong and world doesnt end, what kind of cash return does gold provide other than "being pretty".
No, stocks = zero means the underlying corporation(s) have no value, therefore the paper has no value. If I am wrong, then my return on my investment in gold will be negative, just like any other investment. My gold holdings however, will always be > 0.
Wile I agree there's no reason to put 100% of one's portfolio in gold as some would suggest, I see very good reasons to put a chunk of my portfolio into precious metals.
BTW, the world hasn't ended and gold has done OK in the past 9 years.
your argument is silly. go buy gold.
You are obtuse, go buy more stocks - they look like great value at these level...
Companies can lose money just as they make it. S&P 500 companies are experts in accounting fraud, just like their counterparts in the Nikkei 225 were.
Yeah, the Nikkei didn't go to zero, but it is down 75% since its peak two decades ago, not accounting for inflation. "Stocks for the long term" is a nice theory, but its just that, a theory.
+100000000
Schiff was right, but he was also very, very wrong at the same time. My Parents had my nephew's college savings invested with Schiff. Lost shit-tons of money.
My friend has an account with EPa? and he managed to make money, maybe the problem is not with Mr. Schiff?
I laughed at him... he correctly anticipated many of the crisis events, but his strategy to capitalize on the forecast was wrong on many levels.
http://www.usnews.com/blogs/the-ticker/2009/01/26/peter-schiff-right-on-...
"Yves sent me the attached chart with a few comments. His fundamental view is gold should drop due to deflation. "
I thought you people told me Yves was a chick?
. . .and how the hell do you pronounce it? stupid French
http://inogolo.com/audio/Yves_4478.mp3
Ha! Thanks
rhymes with "yields"
same as your middle name, M E R D E.
Eve.
I could be wrong but I do not believe this is Yves Smith, the female author of Naked Capitalism and head of Aurora Advisors.
Yves Lamoureux , Investment Advisor, Blackmont Capital inc.
thats an interesting reference - so i shall conclude that stocks will rally from here as they did from May levels.
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
Maybe it's a shemale.
Yves Smith is a chick, An ugly one. Honest mistake I guess.
I also predict everything will go UP and DOWN, but not necessarily in that order, perpetually.
See, I can do it too. I should be on TV as a financial analyst.
Wow, you should be on CNBC. You'd need to mention all the waves you are seeing, like wave 54 is an ABX up but wave 97 is an XYT down reverse batman, so you have to look at wave 112034928 for confirmation, etc.
Vegas can be on CNBC, but he/she has to wear either a suit or cleavage, and talk like you said:
"It's a 3 count of a C wave down in an up cycle, after a 31.8% retracement." Gimme a break.
Seems to make sense but I have heard many many predictions of a gold moonshot in the past 4 years. Getting gold-prophet fatigue here.
When late night TV and douchebag AM radio hosts are pimping gold, you know it's reached shoeshine guy hot stock level.
'Bout as tired as we, seeing alphasoup FRN print runs to backstop every stupid debt cycle banking loser, or secret int'l transfers of future taxpayments to save the system, or gov't complicity in illegal algo trading to save the equities, or QE to distort demand for Treasuries, or CFC to steal again from future demand, or the insolvency of every GSE-big bank-FDIC living day to day on lies and fiat dilution. Sick to death of shell insurance companies being backstopped for systemic integrity while paying money we ain't got to financial players who'll just destroy the value again. Tired of the physical economy being killed dead while the finance boys jump on every real/fake but fungible dollar left on the poker table.
Rotten to the core, no semblence of reality in pricing, no meaningful discussion or preparation for the future. Fatigue in watching the slo-mo death throe of a feloniously mismanaged command economy.
So forgive if, after watching all the other crappy IOUs in this system blow up, I don't share your confidence in the greenback signed by Mr. Geithner, or issued by Mr. Bernanke. While I'm sure they've got my back and best interests in mind, I think I'll hedge against the conjob.
Gold. Might help you rebuild after these high crime ex'n'still con men burn the house to the ground. FRNs wont survive, anymore than continentals or confederate notes. These honorable men kilt 'em dead.
Next 20 years won't even resemble the prior 20.
Noted Silver showing unusual strength yesterday on the blog
More impressive than gold today were the gold miners - GDX exploded
volume on GLD (gold ETF) today - just wow
http://www.fundmymutualfund.com/2009/09/gold-gld-breaking-out-of-narrow....
PA and vol both were impressive today. Wished I could have seen the signals, but glad I caught it pre-noon. Should be good for a day, at least.
Remember AIG!!!
Money has to go somewhere, for a little while. Go Miners!
If this is really a triangle that concluded, and it looks like it, the move targets 1058-1128 by mid-oct. I posted a similar chart and comment today here. Next few days are important for this to not become a "bull trap."
http://andystechnicals.blogspot.com/
Sorry, but this article assumes there is not massive manipulation in the gold market.
$1000.00 is a joke. When we reach permanent backwardation gold will not be available at any price.
http://www.gata.org/node/7716
http://www.gata.org/node/7723
gold will = $infinity... i can't believe i am reading this...
Don't worry about moonshots. Just hedge against the USA$ by buying and holding some gold. Pick your own percentage. It's that simple.
*Whilst ads for trading gold show up on either side of the page*... LOL...
You prefer the hooker/sugardaddy ads?
yes
Get the Adblock Plus add-on. Won't be seeing those anymore.
hey senor...costs $$ to run these servers, the bloomberg terminal, you get the point?
click the ads.
Posted a similar chart today. If this is a triangle concluded, then the thrust should take us to 1058 - 1128 by mid-october and that should be it for the gold move. Next few days are important for gold bulls...this cannot become some sort of "bull trap." It will get really ugly.
http://andystechnicals.blogspot.com/
I stopped paying attention when the arrogant author called gold 'fringe' while pumping moronic E-wave nonsense. Then he said gold was 'good for a trade'. Yes, anything that outperforms stocks for a decade is 'good for a trade'. Finally, he said deflation is with us and I wrote him off completely.
Yes, gold is going up, for absolutely none of the reasons this precthologist cites.
+3.1415927...
I just published this commentary today, though it was drafted earlier in the week. This breakout was easily visible in the making. target $2,000
The Next Monster Move in Gold:
http://www.fool.com/investing/general/2009/09/02/the-next-monster-move-i...
Shanghai should be crashing tonight if this is the case. Also, there should be a fullblown commodity dumpage(silver,copper,oil etc.) as the Chinese run for the exits and go to RMB. If they cannot get enough RMB, then I guess they are stuck with gold as last resort. The conversion of RMB to dollars is near impossible, so this is possible I suppose. The Chinese have jacked the price of Chinese gas is up, even though crude is falling. Do they have, pray tell, an inflation cum deflation problem in high speed?
So COT data on gold is neutral?
cot is bearish to some bullish to others.......to me its a contrarian indicator and recently (around the 935 945 level) short interest was extremely high....this could be THE move...govt sachs and the fed will do everything they can to keep the lid on $1000.00....gold over a $1000.00 sets of sheeple alarms and its obviously not good for the bankers fiat ponzi bullshit
gold has been an excellent performer since 2000 if you think in terms of asset appreciation....the gold bull is not done....fundamentals, economics, and monetary conditions will bring gold higher....
the nonsense about deflation is a barf bag job....gold is not a credit based asset like housing so its dynamics will play differently.....
once the gold cartel manipulation is broken, gold will zip higher....
gold is money and everyone everywhere recognizes that fact.....the only ones who don't get it are the brain washed minions of fiat and voodoo economics....and with fiat currency being debased in record fashion, gold will provide the backstop....
I fully agree that the deflation scare is completely irrelevant as far as gold is concerned. It is the stock market that discounts inflation when it is going up (and discounts deflation when it is going down)...
Gold is always a hedge against government instability or government defaulting on its promises.
I owned both gold and silver during the 70's. Hung onto it forever, and then sold in 1979 before it went parabolic. Lessons learned: the accumulation of gold and silver is not to make a killing but a philosophy of life that relies on real things rather than paper. I realize now that if I had continued to accumulate ounces over the years rather than worry about it being up one day and down the next, I would now have real store of wealth that would be rather remarkable regardless of its price today or where it's going tomorrow. Accumulate the ounces and don't worry about prophecies.
That was a brilliant post.
Yes it is. Precious metals over time preserve buying power, and are a time-honored means of storing value.
PM's also make for a great retirement savings when you look at them in this perspective.
It's not about becoming a millionaire over night althought you potnetially could.
What a bunch of FOOLS you people are following; I barely know where to begin:
#1: These clowns are about as a$$-backwards as you can get with regards to the relationship between the "price" of gold and monetary contraction & expansion. This next sentence needs to be read, and re-read until you GET it ---> In the aggregate, Gold OUTPERFORMS in a DEFLATIONARY environment and it HOLD STEADY to UNDERPERFORMS in an INFLATIONARY environment.
Gold is money, nothing else.
in real dollar terms gold doesn't perform at all. Idiots.
make that statement when some choice junior miners go parabolic and return 1000% plus in flash....you're the idiot
Gold as a nominal investment is a waste of time. In inflationary environments, OTHER industrial metals outperform gold. Highest price movement in a metal=COPPER. Now people are dumping it.
Gold is money, and gold has constant buying power over time(not a nominal issue-it's a real price strategy.) Gold always buys you 4 cows, a wife and a nice suit. It hardly ever changes because it has an internal worth to people.
If you are hedging against inflation, then gold rises up and down with the dollar-and it gets sold off if the dollar gets HOT or if the financial system is in DURESS. Read: total failure and read last March. When gold was 1031, miners weren't making any money because CRUDE,copper and labor were even more expensive. Now gold is money and in a deflation, miners have MONEY in the ground-in storage-and only THEY can get it out. Gold bugs are constantly calling for a worldwide dollar collapse which can't happen if you are delevering positions in commodities and stocks. Who the EFF is going to give you gold coins when you cash out? FIRST the dollar gets strong in a flight to dollars then buy gold because it just as liquid as a decreasing dollar supply. If everyone is racing into YEN and DOLLARS, then it's obvious the dollar will base or get stronger
Until today, we had the correlation risk-on,
risk-off. Commodities and equities moved
all in the same direction until today, when
Gold made a breakout above USD961, where
the gold bears rushed to cover their shorts.
Now, some big HF guys start to bet in favour
of the USD. The USD got killed by the gold
move today. There is some talk that the Chinese
are so overloaded with USD, that they counter
trend the rebound in USD, since they know that
HF deleverage means USD buying.
This is extraordinary, and it will be so important
to see, what gold does, if oil falls below 67 and
we see more risk aversion trades.
Copper looks terrible, I would not dare to buy that stuff
right now
The GLD P&F chart made a double top break
out, so the move is quite strong.
Better to GLD short and SLV long... dipped just below 2 yr trend line
The gold jump is a seasonal phenomenon tied to Indian marriage season (gold is a traditional dowry), Xmas stockpiling and Chinese New Year. In fact go back and look at the charts for the last 20 years. Gold prices spike in September in 17 of the last 20 years. I'd hate to be the poor bastard holding this bag when it drops like a rock back to $850
I agree wholeheartedly!
http://www.stockstop.org/viewtopic.php?f=2&t=2068
October Gold is normally positive this time of year - and it will be for the entire month of September. But starting October . . . .
The stars seem to be aligning for a reversal. It also looks like we have the left shoulder and head in the index charts.
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
The stars seem to be aligning for a reversal. It also looks like we have the left shoulder and head in the index charts.
September is the month for gold for sure.
http://www.kitco.com/ind/Holmes/holmes_aug312009.html
Place your bets! This is going to be a very, very interesting September.
The gold jump is a seasonal phenomenon tied to Indian marriage season (gold is a traditional dowry), Xmas stockpiling and Chinese New Year. In fact go back and look at the charts for the last 20 years. Gold prices spike in September in 17 of the last 20 years. I'd hate to be the poor bastard holding this bag when it drops like a rock back to $850
yea, yea, yea, and you can't eat it...
(try eating FRNs)
They are actually forecasting goldilocks in the minutes that came out. Unreal.
Dennis Gartman on "Lost Money" chortling at the gold bugs, saying only 2% - 3% recommended exposure, after all "its just a trade".
Heh, last night, he embarrassed himself saying he had no longs on any commodity except for soybeans, nothing looked attractive.
2-3% What a dumbass...how about 70% with a nice distribution b/n Gold,silver, and palladium.
I find the analysis lacking in several areas. Gold is a good investment and has held its value all year, why? Because it is a safe haven, period. Currencies are crap right now, well toilet paper I guess. Wave theories are theories still because they suck and don't really work. I want gold to stay low so I can buy more, but tht is not going to be the case. Let me fill you in on something, look at the Yuan ETF trading, see anything funny? Yup, China to revalue the Yuan probably to the Euro which is disastrous for the dollar. Gold goes parabolic soon, in my opinion.When gold decouples from the dollar, something is up, period. Deflation is here, but you are making waaaayyy to much of it. Even if deflation is here it is actually bullish for the yellow metal. I respect your views on things, but this is just too far fetched. Not all investments needs to have pretty names like CDO or CDS, sometimes natural, low supply minerals are the best bet.
Yves advise is worthless, I haven't seen a decent call from him since he's been posting @ Yelnick.
Tough call, gold to $1000 when its trading at $970..what's that 3% from here. Paaaleeaase
Now if it were $700 and he made the call, different story.
*double*
Duncan's calls have been pretty good lately, Yves is out of form.
I must disagree with you on deflation. Sure we have it now, but it won't last, and won't be caused by a drop in supply of, or demand for, goods. High inflation will be due to currency devaluation.
i sent this out to friends today.
well folks, today was interesting. as I have been pointing out about getting out of dollars. interst rates on treasuries are down, whcih is usually associated with increased risk aversion and dollar strength. but now dollar is falling along with stocks, and there was a gold break out today. this is very bad for us, and may indicate an increased flight out of dollars. this is the game big ben keeps playing as he forces down long term interest rates. indication is that us dollar no longer flight to safety, but something to be abandoned before it is to late.
I have been following GOLD and SILVER since 1978. I have been Buying, selling,collecting,investigating, traveling and talking to many coin dealers throughout N.A. I am convinced we are the cusp of a collapse and an INFLATIONARY scenario equal to Germany. Regardless of what this blog says.
http://www.thecomingdepression.blogspot.com
Tyler: You are incorrect about deflation and what gold is responding to. To quote Yves or Prechter is irresponsible. Candidly, I expected far more work on your part to qualify something before posting it on the site.
You have been slipping lately and your quality shows it.
Get back to what you do best, before you become the new "CNBC!"
Zero Hedge may or may not agree with ideas presented on guest posts. Consequently, readers may or may not read guest posts (or any other posts for that matter).
Its clear a nerve was hit. Careful lad, you have the ability to be so much more, don't rebel against those that come to hear what you have to say for the sake of feeling less than secure in your position.
Was it really your intent to chase away any who "may agree or may not agree" with you?
Zero Hedge provides assorted information and encourages the critique thereof. It is amusing that upon being presented with information some readers disagree with, they provide censorship advice.
HA! Tyler you crack me up man!
+100.
+1000
People presenting diverse opinions is, in fact, what makes the ensuing discussion worthwhile. If everybody had the same opinion - like on some other blogs that I have read where dissenting from the blog owner viewpoint is a crime worthy of getting you banned - it would be pretty boring, wouldn't it (kinda like MSM-land)? I mean if all you want to do is hear your own echo, why even bother posting anything online - just keep talking to yourself. Moreover surrounding yourself with Yes-men/sycophants is the surest way to self-destruction. Acceptance of diversity in views is one of the BEST things - and a key factor behind it's popularity, I might add - about ZH.
I'll take that one step further: Zero Hedge may or may not agree with its own ideas.
Link: http://www.zerohedge.com/article/dark-pools-price-discovery-and-level-pl...
We are already in a deflationary spiral. It's not my opinion it is a fact.
Is it also possible to have a currency crisis (relatively speaking) during a deflationary environment?
Things you have (assets) ==> worthless
Things you need (commodities) ==> priceless?
Good to already have acreage, guns, and butter, methinks.
I find it very poor form to cheapshot the proprietor via an Anon post. I frequently cheapshot commenters however, that is great fun.
"To quote Yves or Prechter is irresponsible" - puleeze. A fair portion of quotes on ZH are provided for the express purpose of dismantling, which you were free to do if you had the chops.
I love the criticism against gold. Shows me its a good long term hedge.
Every time some loser posts "you can't eat it" I buy some more.
Yeah, but you can't drink it either...
WRONG!. Ever hear of Goldschlager ;^)
Hahaha...me too.
Every time I read that I actually go eat my gold just to prove them wrong. I then crap it out, clean it up, and put it back in the safe.
And then there's Goldschlaeger. So maybe you can't eat gold, but you can sure drink it.
I am Chumbawamba.
I'm old enough to remember silver certificates and $35 gold. Dollars are gold/silver receipts and nothing more, elliot wave cultists be damned.
A two percent move up in gold is a panic?
No. But a sudden break-out from a 2month+ sideways bounce between $925 and 950 to $980 is interesting, especailly given the psychological barrier at $1000/ozt.
Gold stocks where up 8% today.
SLW bought my cocktails tonight.
Doncha just love how many "stock bugs" are still around after getting killed for almost ten straight years?
Gold has been destroying both stocks and bonds since 2000. It will continue to do so ... until, of course, the point at which it does not. By then, the last of the "stock bugs" will give up and sell out of despair.
It amazes me how many "investment professionals" still don't get it. How can a ten-year bull market be invisible?
Shhh....
You are challenging the paper system.
Without paper, how will we wipe our asses?
Joe Sixpack, hahahaha.......great retort.
What good are stocks? You can't eat them! Let's see you buy groceries with them! Let's see you put gas in your car with them!
When people talk about gold, there's always some smarmy comment like this. Why do you need to blab about your investment? It's only people buying gold that seem to have this complex. Like they have something to prove, or want to pimp this like some boiler room penny stock.
What is it about gold traders that makes them so insecure? Buy all the gold you want. I think it's a shitty investment, but who cares? Do your own thing. You never hear quite the same religious fervor over any other type of investment. This makes me wonder. It's a conversation completely devoid of any facts. Some people have remarked about the techical strength of gold, which is nice for a change.The bulk of the comments, however, are the usual predictable and boring recitations about gold.
He was making fun of the idiots who say "You can't eat gold". You missed the point entirely. Good job.
BINGO.
It might be tremendously comical if it weren't so serious. Many millions of Americans have unwittingly bought into the stock bubble, banking on it for their retirements.
Pensions, retirement accounts, mutual funds, it was essentially a massive fraud perpetrated by Wall Street, Washington and the Federal Reserve.
The task of our time is to make sure the unwind doesn't ruin the nation.
The unemployment number for July was revised up by roughly 40%... 360,000 actual vs. 247,000 reported. Just more fuel for the rise in gold?
So what if gold is at $1200 next month?
Does it fundamentally change anyhing in terms of employment, income or productivity?
The markets would have been another crap shoot today if it wasn't for gold taking off and inspiring the miners with it.
Gold is the last resort to store value. Makes only sense that there's more demand for the shiny metal at least for a while (2 to 4 years). Gold may go to the moon and some can afford to be onboard that ride.
Back on earth however reality is that many can't afford the ride and are scrambling to get buy on fewer and fewer DOLLARS in circulation. Some price inflation will kick in based on higher taxation alone and higher interest charges.
But will we buy & sell more TVs, more cars, more appliances, more houses, more this or that as a result of a higher gold price?
No! So guess what? The economy deteriorates further and liquidity is "stored" in gold.
Eventually all those fortunate enough to have "stored" value in gold will want to diversify a bit and buy something. They better find either a buyer at "$50000todamoon gold" or someone willing to trade food for metal.
So your point is that gold is going to become too valuable? Your posting this on an economics blog?
I don't understand your comment but try and make my point clearer:
Gold can bubble up just like any other asset to date. Eventually there's got to be a buyer to take posession of gold at the highest price if the gold holder wants or needs to liquidate.
Why do you think gold marketing companies exist? Why do you think they are spending millions of dollars in advertising to buy gold? To do you a favor or to make money for themselves? I smell a bubble.
Just remember that there's no shortage of gold. As prices go up, the investment into exploration goes up as well. Just like with oil. New exploration companies with good prospects and properties coming online every month.
I like gold as part of my portfolio but I wouldn't bet the farm that gold goes to the moon. When people are asking "is it a good idea to take out a 2nd mortgage and buy gold?".. you know that the hype is reaching pre xyz crash levels.
walküre:
Gold is not the bubble, the dollar is, and fiat currency in general. The entire golbalist, dollar based, central bank controlled, government bond system is collapsing, and gold "knows" this. Other than a problem with the currency, there is no reason for gold to be $1000/ozt. What, demand for gold bracelets has risen 10,000x recently? Gold is being shorted like mad, why is the price still rising (silver even more)? Think about it. Don't misplace the bubble. Step out of your box, but be careful, that first step is a doozy!
Is it possible to buy and take delivery of metal on magin at all?
If not, there is surely no bubble in gold today.
Walkuere, even with the price up four times the mining output is down compared to say 2000.
As far as I understand history, at the last major tp people were linin up aerund a block to buy some coins.
Gold at $5000/oz? Mr. Krugerrand, say hello to Mr. Tin-snips!
You know why they call a US quarter "two bits," right?
If the result of QE is hyperinflation, there will be plenty of buyers @50000/oz. With the promises made by the US GOV the choices are default,war or hyperinflation. Default means the end of the US, unlikely; how do you hedge against war? Hyperinflation is hedged with value stores, of which Gold or other precious metals can be transported, hidden or incrementally redeemed.A modest amount of physical gold/PM cures some causes of insomnia.
Simply not true. There are more dollars in circulation than at any time on record. The dollars are circulating slower than during the bubble, and insane loans are no longer being made. Well, some insane loans anways.
It is critical that as much capital as possible is saved now, gold and silver hoarding reflect that. We cannot afford to have more of the nation's capital destroyed through malinvestment, which is what happened during the bubble.
There was nothing economical in turning people's homes into ATM debt machines. Saving and not borrowing is the cure, not the disease.
Just an anecdote. I have 2 friends that sell me gold and silver monthly. They are deep into multi- real estate property foreclosures. This includes their personal homes. So they are selling to raise as much cash as possible; they desperately need the money. This is in fact the strategy that many are advising in these times.
For you may palm upon us new for old:
All, as they say, that glitters, is not gold.
From, The Hind and the Panther.
Folks: Take a quarter from 1964 and one from say 1995.
In 1964 the 1964 quarter bought 1 gallon of gas. Today 90% silver goes for about 12x face, or $3 for the 1964 quarter. The 1964 quarter buys about 1 gallon of gas today.
What does the 1995 quarter buy?
Bingo!!!!!
Gold is in an inverse head and shoulders clear as day - so MOMO and funds should pile in...we shall see of course in these times if it makes it
When my neighbors start buying physical gold and silver I will know we are in a bubble...til then...its on like donkey kong...
thats an interesting reference - so i shall conclude that stocks will rally from here as they did from May levels.
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
With the fed increasing their balance sheet I think it is possible for stocks and the dollar to both be crushed.
Typically doesn't money flee equities into stocks during a panic sell? This props up the dollar and punishes equities. The problem I see now is that the fed has more and more skin in the equities game. So as equities get punished the flight to the dollar is being offset more and more by how lousy the fed's asset sheet.
I have been following this blog since march and I love it but I have a day job and finance isn't my trade.
I love this blog but I love the comments even more.
Personally I have 5% gold 5% silver and 10% miners. The bulk of the rest is overseas. I will start to move my miner allocation down when gold hits 1500. I will never lower my gold and silver allocations but will sell to diversify. My job pays me in dollars and I figure that is more than enough dollar exposure for me.
Is ther anyone that can explain to me what was meant by "the rumors of a November deadline looming for China to continue to buy Treasuries. (If I were Bernanke, I would call their bluff on that.) " ? Thanks in advance for any response.
Faber on gold during inflation/deflation...
http://www.photoshack.dyndns.org/fabergold.pdf
"I don't follow gold much"
Best performing asset class of the decade.
Too much college.
I started buying physical gold from US$280 until US$900 through my salary. Now I am multi-millionaire. Am I going to sell them at US$5,000. Hell, no!
One thing is certain, in case you haven't noticed.... They have been heavy buyers of sugar. They have been trying to disguise their purchasing to no avail. i suspect that they have pretty much given up on the dollar.
Say adios, goodbye, ciao, my little friend.....
Best regards,
Econolicious
How is the myth Gold underperforms in deflationary enviroments perpetuated?
Worthless instituions such as Bobby Prechter's Eliiot Wave International are doing a fine job at it.
Well...the last time the US saw really serious deflation, the govt simply confiscated gold from citizens. I'd call that a pretty bad underperformance :-)
As far as I'm aware, we don't really know how gold will perform in a deflationary environment. We know how it *should* behave, but we don't know that it actually will. It all depends upon how the herds view PMs. If there is a long term deflation scenario, and fiatscos truly do all disappear into the derivatives black hole, and enough mass views PMs as money (BRICs + bugs + sheeple?), then there will be a stampede and the sky's the limit for PM valuation. But if there really is a stampede, enough to break PM price suppression by Central Banks, then be prepared for Confiscation 2.0. The justification would be that gold bugs are hoarding metal, leading to the price rise and perpetuating the critical shortage of money. It would be true and gold-less sheeple would rally behind the cause being trumpeted on CNBC and try to steal my stash. Don't think for a second that this could not happen, just look at the way the Feds went after Swiss accounts like ravenous dogs and the common-man cheered all the way. "If I don't got it, why should he!".
But if the PM market manipulators can hold the line then the gold bugs will continue to cry wolf, people will get 'prophet fatigue' (nice term whoever floated it earlier), and PMs will continue to be seen as just another asset class, deflating just like all other asset classes against the fiatsco.
Consider the crash of '08 where we saw a huge global snap-deflation. The bugs (me included) expected a sharp and sustained rally in PMs as people lost faith in fiatscos, but what we got instead was confusion in PMs. In the end, fiatsco faith was retained and PMs behaved like an asset class, falling just like everything else. Fine by me, I used that opportunity to load up on physical silver between $9-$12, it's undervalued.
So I wouldn't be so quick to say that it's a myth that PMs underperform during deflation. How can I stick to that belief when I have been burned by it before? Never underestimate the power of the PM bears. Especially in silver, they're downright scary there. Remember, they aren't in this for trade profits, you're not trading against a nervous speculator, you're trading against religious dogma that pays homage at the altar of the printing press.
That's really the best way to view this, two competing dogmas, bugs vs printers. Best place, I think, is to be agnostic, just trade the market you have and don't have faith in anything.
What are you kidding? You seem to overlook that FDR changed the price of gold from $20 to $35, a 75% increase in the price of gold overnight.
That's "pretty bad underperformance" to you? No other reserve asset has gone up 75% overnight in the history of Western civilization. Mind you this was in a period of massive price drops, and currency devaluation against the dollar.
If you can't get that one right, it's difficult to put stock in the rest of your arguments.
What are you talking about?
US victims of confiscation were paid out at the market rate for their gold of $20 2/3. After consultation with major trading partners, the US govt promptly revalued at $35. How on earth does that work out as a gain for those who had their gold confiscated? That's not a 75% gain, it's a 41% loss. Not to mention losing access to gold full stop, how is that a gain?
Before you say "it was a gain for foreign holders of gold", no, with the USD to become the global reserve currency, backed by gold, $35 was the value settled upon between the US and major foreign gold holders that took into account differing exchange rates. No way in hell were nations with strong currencies going to accept a valuation of $21 which would translate into a local loss on their gold. $35 represented the accurate market value in a single world currency so what "75%" gain are you talking about? US citizens got screwed and foreign citizens didn't see much difference at all, if anything they got screwed as well if their nation had a strong currency. You're making the mistake of seeing the USD as the same before and after it became the world's reserve currency.
Next up, how could gold possibly do anything BUT underperform once pegged at $35? As more and more unbackable paper got issued on a relatively smaller amount of gold, the whole game had to collapse as the true value of gold went way above $35. It did, eventually, but everyone sitting on gold before the collapse was sitting on a hugely underperforming asset. Many gave up and regrettably sold it, straight into the vaults of Central Banks.
Confiscation could be much more complicated now. US citizens know that they are being screwed every which way. Direct government intrusion will likely be met with serious resistance.
"finding a lot of the gold commentary at the fringe of financial sensibility"
Well, I find ALL the mainstream economic commentary spewed out by our "elite" government-paid "economists" not only beyond that "fringe", but utterly lunatic. "Jobless recovery"?!?! Are you f--king kidding me?
"But sometimes gold as a trade gets interesting..."
You got that right friend-o...and you'll have the rest of your life to regret that you didn't get on it.
"I don't follow gold much,"
Well, then shut the hell up.
Once you hold a 1 ounce coin of gold in your hand,
smell it, taste it, lick it, fondle it, contemplate
it's solidity, it's firmness, it's golden gleam,
you shall understand why the Rothschilds and others
of their ilk have long understood gold to be their
only true god.
someone's got gold fever
As if the Rothschildes were the power players today.
Someone has a problem with outdated conspiracy theories
.
Those who settle every transaction in fiat currency sneer at the holders of gold. Probably because these poor individuals live hand to mouth and have never, certainly not over generations, had to preserve much wealth. They laughsleeve at the ignorance of those who hold a wealth marker respected by all nations, tongues, peoples for over many a thousand year and instead put all their faith in paper backed by government without principle, leaders without fiscal restraint, budgets out of all bound.
Mock my gold if you will, but in a fist fight I'll take mine over yourn to make the greater impact. Great for keeping the clawing slipperyness of capricious states away from my hardearned; even better for a fist bolster.
Your paper good for anything except flapjawing? Thought not.
Must have 10 grams per day to sustain life. Paper? Must have truckloads and that varies hour to hour. Learn from Zimbabwe Bobby or Weimar Mary, but you must have your lamps filled with oil before the hour of need, otherwise you are cast out to fend for yourself day to day, instant to instant.
Takes me chances with the gold over the other. Besides it spends anywhere in the world without the need for exchanges, or the greedy bastards that flip the fiat.
I recognize the hyperbole, nonetheless, I think you meant to say 10 grains.
Tyler, when did you site get filled up with a bunch of conspiracy-theorist gold-bug nutjobs? I mean, it's one thing to say that it will trade higher or whatever, but the people here are frothing at the mouth TRUE BELIEVERS.
Too many people selling the "PMs as protection" line. Fundamentally, it's true, but there are just too many people saying it and I don't believe they have the net capital required, a willingness to take delivery, or the brains required to squeeze the uber-shorts (one day they will, but I don't think it's now).
I'm looking around for the bull trap. Maybe I'm being paranoid and will miss the surge, but hey, I'll live. Ready to short if I hear the snapping jaws.
The goldbug evengelists don't have the firepower, and maybe not even the altruistic funds, but Governments outside of the US/UK sure can. Look at this years selling under the Washington Agreement, extrapolate forward, and...it's gone!
It's increasingly looking like you're right. Russia and China might be the Revenge of the Hunt Brothers, but it's still early days. Very pleased about this run-up as I hold allocated bullion at the Perth Mint, but still ready to short the paper ETFs if it all fizzes.
Hell, if the BRICs really are declaring financial war here, then short ETFs at the right time is a nice move, they're going to get broken real fast.
Early days, early days.
The conspiracy is the Federal Reserve, not gold or silver advocates. Anyone defending the Fed system is a partisan of usury and debt slavery.
See Bank of the Unites States I and II.
"when did you site get filled up with a bunch of conspiracy-theorist gold-bug nutjobs?"
Ever since we got MSM-programmed paper-bug nutjobs peddling their idiotic nonsense as fact.