It's Going To Implode: Buy Physical Gold - NOW

Gordon_Gekko's picture

For previous articles by the author go to: Gordon Gekko's Blog

 

Evidence seems to be mounting that we are headed towards some sort of implosion in the paper Gold market, and perhaps the currency/bond markets in general. Let’s take a look:

Jacksonville, FL based EverBank – a bank with approximately $8 billion in assets and 1800 employees according to the company website – recently sent this notice to customers (courtesy of Warren Bevan):

"Non-FDIC Insured Metals Select Changes" -

 

Section 6.3.7. General Terms: We have added language clarifying our right to close your account. We may close your Metals Select Account at anytime upon reasonable notice to you. If we believe that it is necessary to close your account immediately in order to limit losses by you or us [GG: We really don’t give a s**t about you; it’s us that we care about], we may close your account prior to providing notice to you. Notice from us to one of you is notice to all of you [GG: the nerve of these people!]. If we close your account, we reserve the right to convert your Precious Metals to U.S. dollars and tender the balance to you by mail [GG: I am willing to bet my entire Gold stash that when you receive these "converted" dollars, they will be nowhere near the market price of physical. What did you think that whole "limit losses" thing meant?] .

If you have a "Non FDIC Insured Metals Select" account with these people, you can pretty much say goodbye to any chances of ever seeing your metal. This is a clear sign that the (already tight) availability of physical metal at the manipulated Comex futures paper price is in danger of vanishing altogether. Think about it. What is the scenario in which they avoid catastrophic losses while at the same time sending you the US dollar value of the metal? When the official or Comex price has fully decoupled from the physical price. Expect to see more such notices from banks offering Metals "Investments".  

Citibank recently issued this notice to its checking account (remember the type of account where you thought you could withdraw your money whenever you wanted? Well, not anymore) customers (via Market Ticker):

Withdrawal Notice:

 

We reserve the right to require seven (7) days advance notice before permitting a withdrawal from all checking, savings and money market accounts. We currently do not exercise this right and have not exercised it in the past.

 

Hmm…let me see. Why would a bank need to impose withdrawal restrictions? Has this kind of a thing happened before somewhere? Could it be because of the danger of a bank run/capital flight from the United States?  Why would Citibank fear bank runs? Why would money flee the US banking system/US? Could it be because the entire US banking system and the US Government is INSOLVENT and people - fearing a collapse in the dollar’s value (in terms of real goods i.e. for all you Prechterites out there) - rush to withdraw money convert it into real goods such as precious metals? You tell me. Also, could they maybe increase this notice period from seven to whatever the hell they want whenever they want? What will you do then? Even if you don’t buy Gold with it, withdrawing your cash from America’s insolvent banks is a very wise strategy at this point.

One of Mish’s readers Construction Insider recently sent him this little nugget:

Hi Mish

I work in the construction business and something has been creeping to the forefront of my attention for the past few weeks and now it seems to be moving full steam ahead.

 

Banks are forcing developers/builders (especially smaller ones) to give up their properties (unsold homes and lots).

 

Banks say the reason is that the properties in question are no longer performing assets. I am sure there are some loans out there that are not performing and the owners are going under. I am equally sure that there are plenty of developers that are still selling homes - just not at the pace originally planned on the pro formas.

 

Having inside information on one of these scenarios that happened today, I cannot help but wonder what is really going on? The bank told a small developer/builder I work for that they were taking back his ongoing subdivision.

 

He is selling houses and updated pro formas would indicate that the current sales pace would exhaust all remaining lots within 33 months. Yet the bank stated they would only give him until April 15 to find alternative financing. The bank is also willing to let him buy the subdivision at a 33% discount to what is currently owed.

 

If he is unable to obtain this backing, the bank will let him walk away without penalty or consequence so they can write it off.

 

I have been on the phone trying to put some of these pieces together. It seems there are many banks doing the same thing. However, there is apparently no interest [or ability - Mish] from anyone wanting to pick up land/lots at 30% - 50% discounts to today's prices.

 

Another interesting point is that the banks all state that they must have these situations written off or taken care of by the end of Q2.

Looks to me like DaBoyz are calling in the loans while the currency still has some value. Does the government plan some type of overt currency devaluation or expect the dollar to collapse on the currency markets of its own sorry weight? The cracks are already appearing in the Bond market. Foreigners are increasingly fleeing the Treasury auctions. The only thing keeping them going is manufactured "deflation" fears from time-to-time. A recent 30 year auction (10th February, 2010 to be precise) practically failed. This is what Mr. Denninger had to say about it:

Bad.  Actually, let's go worse than bad and call it what it is - by any definition this is just one step off from "Failed."

 

The more-worrying factor here is that we've got this "mystery" direct buyers out here again taking nearly 25% of the offered amount (who is bidding for that undisclosed?) and another 11% taken down by The Fed for the SOMA account.

 

Yet even with this Treasury had to pay up to get it to go and the bid-to-cover was anemic at best.

 

Given the Primary Dealer system we have in this country, any BTC under 2.0 is an effective fail.  To get an auction that behaves in this sort of fashion, complete with mystery direct bidders and heavy SOMA (Fed) participation, yet Treasury has to pay up in the form of a significantly higher coupon is not a good sign at all.

And this is what happened on 23rd February, 2010 for a 4-week $37 billion Treasury Bill auction (Per Graham Summers):

There are times in life when one witnesses something so outside the scope of normal experience, that at first you don’t see it.

 

Captain Cook’s diaries tell us that upon first seeing his ships offshore in Australia, the aborigines expressed “neither surprise nor concern.” Cook notes that it was not until he and his men approached the shore in smaller, more familiar vessels that the villagers reacted, arming themselves as “the sight of men in small boats was comprehensible to them: it meant invasion.”

 

Well, I had a similar experience during yesterday’s bond auction.

 

Roughly, 27% of the auction took place at the highest rate. This means nearly one third of the demand from competitive bidders (those who care about yield) came at the HIGHEST yield that was accepted. In plain terms, this alone tells you that investors want higher yields from Treasuries since nearly a full third of the debt issuance took place at the highest REQUIRED yield.

Of the competitive bids (meaning those bids coming from folks who care about yield), roughly 70% went to Primary Dealers (investors who HAVE to buy the debt and who usually turn around and try to sell it afterwards). To put this number into perspective here is the percentage of competitive purchases made by Primary Dealers in the last four 4-week Treasury issuances:

 

 

...yesterday’s auction featured MORE buys from Primary Dealers than almost any of those occurring in 2010. Remember, Primary Dealers HAVE to buy Treasuries. So to see them buying a high percentage of Treasuries at debt auctions means that few investors who can pick and choose what to buy are actually looking to buy US debt.

 

Of the remaining competitive buys (about $8.86 billion), only 32% came from Direct Bidders or those who bought debt directly from the Treasury: orders that can easily be tracked. The other 68% ($5.9 billion) came from Indirect Bidders: folks who we cannot track.

 

Even more bizarre, only $5.9 billion in Indirect Bidder competitive buys were ACTUALLY OFFERED. So we had a 100% acceptance rate for Indirect Bidder competitive buys.

Let’s put this in perspective:

 

 

This means that the Treasury took up EVERY single cent of competitive bids coming from indirect buyers. Remember, indirect buyers are usually assumed to be foreign governments (even the Treasury website admits this).

 

If this was the case yesterday, then foreign governments barely bought much of anything in yesterday’s auction (only 19% of total debt issued). Moreover, it implies that Primary Dealers (those having to buy) had to gorge on the auction to make up for the fact that few if any foreign governments are interested in buying our debt anymore (including even short-term debt).

So basically the demand from the indirects (i.e. foreigners) for US Debt is drying up and the Treasury is taking all of whatever miniscule amounts they are offering. As if that was not enough, we had another similar auction on 9th Match, 2010 (via zerohedge):

Two weeks after the indirect hit ratio in the 4 week auction came at a record 100%, today it was once again at almost at the all time possible high, with Indirect Bids of just $6.744 billion taking down $6.683 billion, resulting in a 99.1% hit ratio. The chart of the recent Indirect hit ratio in recent 4 week bill auctions is attached:

What’s more, the yield doubled from two weeks ago. What we are witnessing here, in my opinion, is the beginning moves of a complete and total repudiation of the US Bond market, and indeed, all dollar denominated paper financial assets.

 

Jim Sinclair recently had two gentlemen from Poland and Russia speak up at his Toronto meeting. This is what they had to say (in Jim’s words):
Dear Extended Family,
 
I believe the most important event at our Toronto CIGA meeting was the testimony of two attendees.
 
Two men spoke independently. One is a Canadian resident from Russia and the other from Poland.

Both said the same thing, "All the signs that preceded our inflation of more than 100% per year are here now in the West."

What more do you need to know?

Regards, 
Jim

Any unbiased observer who knows how to put two and two together will be able to tell that something very fishy is going on. The urgency with which trillions in debt is being shoved down the market's throat at the worst possible time for the US Economy has the distinct smell of the government trying to extract every last bit of money from those stupid enough to buy the bonds before it all blows up. Rest assured, a huge chunk of this money is being funneled to the insiders who are most likely covertly using it up to buy real assets for themselves while keeping the crowds distracted with the stock market circus.
 
The bond market is the backbone of the US Ponzi Finance system. When it goes – and the day is not far in my opinion - the whole enchilada will come crashing down. Any type of financial asset that has a counterparty – which is pretty much all the paper assets in the world – bonds, futures, any and all derivatives and yes, even the paper currency – will crash. What will they crash against? Yes, that’s right - Gold. All the world’s capital – trillions, perhaps quadrillions of it - will come rushing into the very tiny physical (NOT paper) Gold market. Remember, the world’s real physical capital – real assets such as land, oil-refineries, mines, infrastructure, etc. will not vanish, only it will be re-priced in terms of Gold and its ownership transferred to those who hold it. Since everything stays on this planet, it is a zero-sum game and the winner will be Gold. In other words, an ounce of physical Gold will command a lot more in real purchasing power than it does today. Just like a national currency is a claim on goods and assets within that country, Gold will be a claim on global goods and assets worldwide.
 
Paper Gold Will FAIL
 
Today what you think of the price of Gold is nothing but the price of paper Gold. "What is the difference between the two? We are still getting the metal at the price we see on the COMEX, are we not?", you may ask. Sure, but the key word is still. Even today you have to pay "premium" to the futures price to get physical ranging from about $50 for some coins to about $10 for bars. When it all blows, these “premiums” will skyrocket and the price of physical WILL decouple from the official paper price (this is what the guys at EverBank are scared s--tless about), as we already witnessed in 2008 – and this is the good scenario. Indeed, we may have a situation where there is no physical available at any paper price. 
 
1. The GLD ETF
 
The problems with the GLD ETF are too numerous to enlist here but why bother when they have already mentioned 'em all in their prospectus! It is simply another Wall Street scam designed to rip off the retail investor and rest assured, when the SHTF, you will be the last in line since the insiders need somebody to hold the bag in order for them to get bailed out. YOU will be the one left holding the bag. Unless you have a direct line to Ben Bernanke, I suggest you get the hell out of any paper ETF’s such as GLD, SLV, etc. Remember AIG? It’s all good until it isn’t.
 
2. The Gold Futures Market
 
The futures market is nothing but a tool for the dollar managers (US Government/Fed/Bullion banks) to manage/control the price of Gold. Any rational observer with an iota of brain who has watched the gold market for any reasonable length of time can tell that the price is intentionally driven down during the Comex trading hours. If you don’t believe this, either you’re in denial or worse – collusion - and IT WILL end up costing you big time. Given the massive, concentrated and long-term (the entire past decade - they haven't been net-long - not once - during that time period) nature of their short positions, it really isn’t that hard to deduce that the banks do not nearly have enough metal to cover their shorts and that the sole intention of the massive short position is to control the price. Whenever the price rises (or threatens to rise) the big bullion banks ala JP Morgan create massive naked shorts introducing fake supply of Gold in the market, thus driving the price down. “But the price has been rising for the past decade, hasn’t it? So how can you say they are driving it down?”, many people ask. Well, the constraint on the bullion banks has been the availability of the physical metal. If the metal is not available, the fraud of the paper market is exposed and they lose their price managing ability. So they allow the price rise to a level at which there are some weak hands willing to sell and then they hold it there till all the sellers have been exhausted (I am assuming the Fed has already sold all the US Gold during the past decade). So strong are Gold’s fundamentals that despite the massive rigging, all they have been able to do is slow its rise. The weak hands who sell the physical metal at every price rise have helped them in this endeavor. But soon, as the bond market implodes, they will run out of sellers. Treat the availability of real metal at today's paper price a gift and buy as much as you can.

To those who think that the Comex shorts will be crushed one day and the price of paper Gold will do a moonshot, to them I will say that you are dreaming. The Comex shorts will be crushed, but not in their own casino! If and when a majority of paper Gold longs demand delivery a force majure (who do you think the US Government will side with?) will be declared with cash settlements and/or offers of equally worthless GLD shares (don’t tell me you didn’t know about this). By some accounts, this is already happening. What will happen to the paper price then? That’s right – it will utterly collapse even as the physical’s price is rocketing. Paper gold holders will dump it all to buy the physical – which, unfortunately – will most likely not be available at all. Yes, yours truly has been trading the paper [Gold] markets himself, but only with the objective of converting the paper profits onto the metal. Having said that, in light of the sum total of the recent developments mentioned in this update I think it is too risky to be trading right now and one should just sit 100% in physical Gold and some currency for day-to-day needs. 

Additionally, there is increasing evidence that the Europeans have withdrawn support from Wall Street’s paper Gold market (COMEX and the LBMA, which also operates on a fractional reserve basis as documented here) and are in favor of setting up a physical only Gold market (this is quite a long story - for details, I suggest you go through FOFOA’s blog). Jim Willie had this to say in a recent piece (he’s been accurate on many things so far, so I at least pay attention when he has something to say): 
Fast approaching is the event of GAME OVER for London, a condition that has already reached critical level, according to a key reliable source of information with London connections and direct experience with its market events. How long can a major metals exchange sell contracts but have miniscule supply of gold in their vaulted possession? The paper gold market and the physical gold bullion market have finally separated in a practical manner, meaning actual gold has almost no role anymore in London paper contract settlement. The absence of gold in London requires extraordinary tactics to settle contracts and to obtain gold bullion. Red tape procedures delay delivery for individuals, and bribes accompany gold delivery demands as standard practice. The London Bullion Market Assn has almost zero gold, its supply having been drained in high volumes since early December, a process currently in acceleration. The opportunity to convert fiat money into precious metal at prices considered reasonable is also vanishing. The London gold banker said,
 
"There is going on a lot more than meets the eye. The physical system is actually consolidating bigtime and is organizing itself with lightning speed, totally hidden from pretty much anyone, even the so-called insiders. The paper precious metal market and the physical precious metal market have defacto disconnected. The paper and physical gold markets currently operate in parallel universes. The outflow of physical metal from bank vaults is happening at a mind bending pace."
Wall Street and the US Dollar are being increasingly marginalized at the global level with China having instructed its companies to renege on Wall Street’s derivative contracts last year; Russia, Middle-East and China setting up their regional currency blocs; Germany calling for an end to the CDS casino and the recent exclusion of Wall Street banks from European Government bond market. For obvious reasons, none of this is getting much play in the lapdog US media.
 
Physical Gold in your personal possession is the only thing that will survive the coming financial Armageddon. What we are witnessing right now is nothing but the calm before the storm. Keen observers are hearing rumblings beneath the ground signaling an imminent volcanic eruption. Once it blows it will be too late to take action. Trading paper markets for paper gains is like picking up pennies in front of the steamroller. It’s time to stop trading and just buy the physical metal. The window of opportunity to convert your casino chips (fiat money) into real money, i.e. Gold, is getting smaller by the hour. He who panics first, panics best.
 
GET. GOLD. NOW.


Disclaimer: Nothing in this commentary should be construed as investment advice or guidance or any recommendation to buy or sell any financial instrument. It is not intended as investment advice or guidance, nor is it offerred as such. It is solely the opinion of the writer, who is NOT an investment counselor/professional. All content of this commentary is solely an expression of his personal interests and is posted as free-of-charge commentary and is subject to error and change without notice. Please do your own due diligence before investing in ANYTHING. The presence of link to a website does not indicate approval or endorsement of that website or any services, products or opinions that may be offerred by them. 

 

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Anonymous's picture

Excellent piece GG. No doubt the US is in serious trouble, but factor the following into any doomsday scenario. The US shares a northern border with a resource-rich, sparsely populated, common language/culture, immense-sized neighbour called Canada. Furthermore, Canada's finances are in relatively good shape. When the US currency gets into trouble, there will be momentum to create a North-American currency (aka AMERO), backed by Canada's resources, Mexico's oil and low-cost workforce. All it will take is a threat (whether manufactured or real) from a common enemy, say the Chinese, to Canada's arctic, for the US to trade off protection in exchange for a common currency union. Watch for it if/when the conservatives form the next government.

swamp's picture

Watch those conservatives. The liberals would never do something like that. lol

mtomato2's picture

"There's always money in the banana stand..."

Anonymous's picture

Correct me if I am wrong.Did not the government make owning gold illegal in 1934.If we have another implosion,why can not the government confiscate gold again?Why have the gold stock been going down recently?Do not these companies own any physical gold?

dumpster's picture

your wrong  they made it illegal ,, but only the chumps turned it in ,, it was a way to devalue the buck ,, ''today that is not the case ,

every wonder why there are so many gold pieces dated 1934 and before..

some how the lemmings and do nothings are the first to pronounce gold worthless then in the same breath give warning that government will take it, lol

 

not a braincell among the zit crowd raised on Keynesian goo. weaned at the tit of comparative little life span /// raging against the older crowd while the pimply faced youngsters dead head away at the derivative beast in locked cells  of computer speech  destroying the financial system ;

 

the little turds of  misinformation open their mouth and expose the framework of their little understanding . like maggots feeding at the open toilet of the wet behind the ears gang,, not even knowing what they do not know... enough experience to open a can of beans . yet vision to experience only the end results of the eating .

 

 

merehuman's picture

I would call that Papa-poetry Mr Dumpster, well said

merehuman's picture

Dumpster, you got a belly laugh outa me . Thanks. Chewbaca and the force is behind you.

dumpster's picture

and you would eat both the mother and child   speak for your self hair lip.. a cave dweller ..

a enlightend person would not be in that position ,, ...

 

but it seems like this board is made up of all levels ,,, the kids the grownups ,, and all between,,

go chew on your arm lol

 

Fix It Again Timmy's picture

All trading involves surpluses, no surplus - no trade, no matter what the medium of exchange is.  How bad can it get, well a starving mother will steal food from her child, yep, we humans sure are a piece of work...

Anonymous's picture

Let's be real guys - unless in conjunction with some world wide disaster (asteroid, super volcano, etc.) all we are talking about here is rampant inflation and the means with which to protect/hedge against it.

As GG points out, due widespread fraud in paper gold assets & tungsten gold bars, physical gold takes that element of risk out of the picture and then you're hedged.

dumpster's picture

GG important information thanks

from sinclair 50 years in the gold market

Jim Sinclair’s Commentary

Here are my comments on the algorithm driven gold gun slingers and semantic fundamentalists:

It is becoming evident to anyone with a brain that the ravingly bullish end of year televised economic pep rally was pure propaganda.

Enter the proverbial question of deflation or inflation, which is semantics only. Hyperinflation is a currency event and not an economic event. Therefore it can occur under any condition that causes a flop in confidence.

That condition is building and building in the Western world as the lies become more evident everywhere.

The money managers and computer nerds have been selling gold for four days. It was evident on the first day as the dollar fell and gold failed to react much at all.

They will be back buying at higher prices. Gold is going to $1650 and higher.

Anonymous's picture

I am wondering.....why doesn't the Fed just print up a bunch more FRN's and just buy physical gold. They could buy the IMF gold - instead we believe that the US Govt is selling gold to suppress the price? Seems silly - they could own it for free just by printing more (at least until faith in FRN's was gone).

Don't get me wrong - I see the math, and it looks like the USGovt is bankrupt - and I own some coins myself.

DoChenRollingBearing's picture

I´ve wondered as well why WE don´t buy the IMF gold.  Just sell a lousy $6 billion in 30 year debt, chump change.  And we have another 190 or so tons.

Mr Lennon Hendrix's picture

It would be an indicater that the US is in a big hole, and if the US is in a big hole well, everybody else is shit outta luck (the truth is unobservable to most at the moment, and it must remain this way until their police grid is in place).  These guys are not rational, and they definately do not want anyone thinking about the SH'nTF.

This is why Japan (Germany?  no, Japan.) will get it (Wednesday).  Astute observation noted DoChen; the gold does need to go to the Trilateral Commision.

http://www.trilateral.org/about.htm

deadhead's picture

GG...very well written and you make points that people should really pay attention to.

We are in a big, big, big heap of trouble.

Keep posting and commenting on ZH, please.

SRV - ES339's picture

Just wanted to second DH, and thank you for your time GG!

As an investor in (non US) gold stocks, I must admit to having a bit of an issue with your advice to sell gold ETFs... surely you realize the possible negative affect on short term gold prices... what the f#$k were you thinking!  :-)

For those looking for alternate bullion purchase options, Sprott has a new Physical Bullion Gold Trust in Toronto that looks very good (IMO). It's 100% secured with bullion held in the Canadian Mint, and delivery is guaranteed... Mark Faber has just signed on as a Director of Audit.

http://www.sprottphysicalgoldtrust.com/

Anonymous's picture

Thanks for the great post GG. A basic question for you and everyone on ZH: What’s the best way to own physical gold? I own some gold bullion, but I haven't been set up to hold it "personally" (no safe, no shovel, no fence, no lead delivery devices). So I've got it in the form of allocated physical gold bullion, held in a depository over in Australia. I pay a storage fee, but at least I have a certificate indicating the specific numbered bars that are (supposedly) mine. Does that setup meet the criteria for gold being "in your own possession", or do you think even "allocated gold" in a depository could just disappear in some future scam when SHTF? And if you don't keep it in a depository, what can you do with it? Thanks!

DoChenRollingBearing's picture

If it were me, I would sell your allocated Australian bar, take the money and buy 1 troy oz. American Eagles.  If you have no backyard (big safe, etc.), then put your gold, say, behind one of your HVAC vents, in a coffee can in the kitchen, or whatever creative place a thief would hepefully not think to look.

You could put half in a safety deposit box, understanding the risks that .gov might seize it.  But, half is covered re burglars.

One man´s opinion.

swamp's picture

Stellar. White hot. Get physical or get shanked.

Frank Owen's picture

GG, Good article and a few links i hadn't seen. Wondering what your take is of the possibilities of another warp-speed deleveraging situation unfolding where gold might be sold off a fair bit because it would be the only thing in the black that well help fill the massive red holes in the rest of the portfolios... Is an initial shorting via some ETF, while already having physical possession a prudent possible strategy?

Hope the leaf springs in your limo are holding up.

Gordon_Gekko's picture

Sure, it could play out that way and I thought about it but I have decided that the risks are too great. What if the paper price rockets before collapsing (i.e. extreme volatility)? What if the physical is not available at the crushed paper price? It's not the time to gamble with your hard earned capital.

JimboJammer's picture

Great  Job  Gordon  Gekko ,  only  3 %  of  the  people  know  about  this

banking  problem .  John  Conner  is  right ..  get  ready..  the  crash  will

come  in  quick  and  hit  hard..  The  internet  will  play  a  big  part..

the  banks  are  still  dealing  with  OCT  Derivitive  Losses  from  2008.

walküre's picture

Not a matter of "if" but WHEN for me.

Prepare for your kids and/or grandkids sake!

Land, ammo, tobacco, seeds, gold.

The flush and rebirth will take approx. 20 years. Not sure what's going to emerge, who is left standing and what they're going to call it but don't overthink it. Paper won't matter. Contracts will be worthless. Standard response will be "who cares? we're broke".

Sovereign defaults are coming in 5 years tops.

i.knoknot's picture

tobacco? that's bad for your health.

maybe bullets instead.

:^)

 

mkkby's picture

GG and Friends - interesting post.  As investors we must consider what could go wrong with this scenario:

1.  Bond auction, low participation - why shouldn't the gov grab every low rate dollar they can?  When demand falls off they can always raise rates a little.  Imagine the demand if rates went up a few percent.  Retirees and income sensitive investors would come running, and rates would still be well below historical norms

2.  Currency crisis, devaluation - Holding physical PM is definitely the safest in a SHTF scenario.  But what about less extreme outcomes?  Low liquidity is the problem - to sell you have to mail your metal somewhere.  The market can tank very quickly, and large players are shorting it in concert.  Wouldn't it be better to pick a safer currency, like CDN.  You can stop out of it in a heartbeat if you decide your timing isn't perfect.

walküre's picture

"The market can tank very quickly, and large players are shorting it in concert."

Let them try and short gold. How are they going to get paid and God forbid they have to take posession.

Shorting gold is a zero sum game in a debt inflated environment.

 

 

 

 

Ripped Chunk's picture

"We have added language clarifying our right to close your account"

You have no rights. We are keeping your money. Bitch loudly enough and you will be categorized as an "enemy combatant" and never seen again.

PS: Thanks for the equity contribution. Your valuation now equals zero.

SWRichmond's picture

Yep.  Time for capital to go into hiding in earnest.  No doubts.

Anonymous's picture

GG what are your thoughts on Sprott`s Bullion ETF

lsbumblebee's picture

Your article has been linked to "Best of the Web" at Dollar Collapse.com. Congrats!

http://dollarcollapse.com/

merehuman's picture

well done , Mr Gordon_Gekko.

I too enjoyed your article. I like truth much more than comfort ,false or not.

Thank you.

Anonymous's picture

GG nice to see ZH posting stuff from some of the earlier followers - Where the heck is Project Mayhem and Cheeky - at least Robo still posts regularly but I am getting pretty bored with the likes of Mad Hedge Fund and rants from Reggie and George Washington (and I am visiting ZH far less these days)

43 Steelie's picture

Master Bates, you're a douche. But I respect your willingness to go up against a passionate, overwhelming majority. 

 

Here are just a couple of reasons why I believe you will be proven wrong:

1. Your argument of, "what's the point of holding gold to the point of shit hitting the fan, because at that point someone will probably steal it anyways" is fairly ignorant. If conditions do deteriorate, I highly doubt anyone here is expecting to take their gold and try to use it as a means of exchange in the streets and in everyday life. Gold is an international store of value. If conditions do deteriorate here and I need liquidity, at that time I will simply sell my gold in another currency to an international buyer. It would be extremely self-centered to think that the death of the U.S. dollar will lead to the death of all countries. Yes many will go down alongside the U.S. but more prudent nations will hold their course and will see their currencies rise in value.

2. While it may seem so on ZH, not every gold holder is predicting a doomsday scenario. Most are just looking at the fundamentals and continue to believe in an upward trend. I believe there have been something like 770 currencies since 1360...the U.S. dollar is just another one of them.

3. This argument has been brought up several times before...but outside of ZH, go ask anyone in your office how much gold they own. I work for a private equity firm with professionals who have spent their lives in the finance industry and I am willing to bet that there are no more than 10-20oz. of gold total held amongst the 30-40 or so individuals with upwards of $500,000 net worth each to their names. When the whole country starts thirsting for gold (not just bloggers and economists), then maybe I'll consider selling some (in CADs).

 

Anonymous's picture

The hundreds of people that will not buy physical gold and silver because they are too smart and the obvious truth is, well, just obvious.

"I know that most men not only those considered clever, but even those who are very clever and capable of understanding most difficult scientific, mathematical, or philosophic, problems can seldom discern even the simplest and most obvious truth if it be such as obliges them to admit the falsity of conclusions they have formed, perhaps with much difficulty conclusions of? which they are proud, which they have taught to others, and on which they have built their lives." Leo Tolstoy

They are men standing out side as a cat5 hurricane is about to hit, they don't believe it and there is nothing you can do for them. It's time for the rest of us to buy food, guns, bullets, gold and silver then hunker down.

Anonymous's picture

dunno if its been said, about soros and aall others buying into ETFD's maybe these big guys are claiming all the physical to actually break the ETF's and are also shorting the etfs, then selling their physical also at top ?

if i was a rich bastard its what i would do,. especially if i have a cabal of other rich gits agreeing to the plan

Anonymous's picture

gold is in permanent and severe backwardation.....ignore the fake paper gold price - it is a show put on by the sociopaths at the rockefeller controlled fed, treasury, goldman sachs axis of evil....

obewon's picture

@ Gordon:

Thank you for your excellent commentary! You’ve done a superb job of summing up the central problem in this country, as it relates to the need for citizens to own physical gold, and the desperate attempts by our government and their agents (JPM and GS) to suppress the gold price on the COMEX.

 

When viewed from the federal government’s perspective, they believe that they MUST MANIPULATE the gold price, as well as the equity and bond markets. Further, they believe they MUST manipulate the Treasury bond market and hold interest rates down, otherwise the interest on the US debt will explode, hastening the demise of the US economy.

 

For your readers, here’s some very relevant info that supplements your commentary.

 

1. JPM’s Gold Short Position is Over 30 million oz:

Since December 2009, DaBoyz (principally JPM), working as agents of the FED, have been extremely active in the daily suppression of the gold price. They’ve gotten so blatant that they don’t even try to hide their suppression schemes any more, as they used to do in 2008 and 2009. With over 30 million oz short, there is no way that JPM could ever cover these shorts, and they never will. No “for-profit” buyer or seller of gold would ever behave as JPM has done over the past 2 years.

 

2. LBMA Gold Scam is Exposed:

Here’s an excellent, factual commentary by Adrian Douglas’ on 1 March 2010. 

Link: http://www.gata.org/node/8388

 

3. Gibson’s Paradox Revisited (Lawrence Summers):

The US government knows it must keep interest rates down, and the best way to do it is to suppress the gold price. Lawrence Summers (former Treasury Secretary under Clinton, and now the one who is calling all the shots for Obama) wrote a famous essay on this topic in 2001.

Link: http://www.gold-eagle.com/editorials_01/howe082201.html

 

4. Alan Greenspan’s Famous Essay on Gold and Economic Freedom:

Greenspan made no secret of the “need for a gold standard” in this essay, written in the mid 1960s, about 30 years before Greenspan became FED Chairman.  In Greenspan’s own words:

In the absence of the gold standard, there is no way to protect a citizen’s savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold [by FDR in the 1930s]

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.”

Link:http://www.financialsense.com/metals/greenspan1966.html

Fast forward to 1987, when Greenspan became FED Chairman; it didn’t take him long to bow to the demands of the Power-Elite. Greenspan began his own gold suppression scheme, thus selling out the rights of American citizens.

 

A Wish for Every American Family:

Once the concerned American digests the factual data in your commentary and the info above, he/she will "see the light" and buy as much physical gold and silver as they can afford. In my opinion, this "window of opportunity" will not last beyond 2010.

 

seventree's picture

What about, for example, physical silver held in vaults by an IRA custodian? These would be nominal 1000 oz poured  bars, each stamped with producer, actual weight (usually between 975 and 1025 oz), and serial number. The IRA owner receives a printout of his personal holdings. For practical reasons he cannot visit this vault, which would not be useful in any case since no doubt these vaults contain the holdings of many investors -- there would not be a separate pile for each owner with their name on it. But still the owner has claim to specific bars within the vault, individually identified and not belonging to anyone else. In theory there would not be a problem selling one or more of these bars at any future time.

It seems to me that this poses less investor risk than paper holdings, in a scenario as described above. I'm not talking about a Mad Max total societal breakdown situation, but one where financial systems still work, agreements are honored, but anyone who can be legally screwed will be.

 

Anonymous's picture

Sometimes the truth is right in front of us, but we fail to integrate it, to accept it, and to act upon it because we're talking too much..being too 'output only' and not integrating what our senses are telling us.

I suggest to everyone to take 1/2 hour for themselves when they can and just meditate quietly. Allow all the information you've absorbed from the web, from elsewhere, and your God given sixth sense (gut feelings, clairvoyance) to inform your 'consciousness gestalt' of the facts.

Then, quietly go and bury your gold in the backyard at 3 am like the rest of us that have already done so.

Peace and Love,
-MobBarley

merehuman's picture

Most excellent advice.

Anonymous's picture

Gordon, you say this same shit every time.

This is IT!

NO, THIS is IT!!!

No, I MEAN IT, THIS IS IT!!!!!!!!!!!!!!!!!!!!!!

I agree with you eventually, but not for a long LONG LOOOOOOOOOOOOOOOOOOOOOOOOOOONNNNNNNNNNNNG Time.

Nothing's gonna happen, JPM and GS just took over COMEX, this can go on for Decades!

Anonymous's picture

Its not necessarily a good idea to take delivery of good. To buy gold without a premium, you need to buy london good delivery bars. Yes, they are 400 oz, and about $440,000 each, a little steep for most of us. However, you can buy 'allocated' gold which is part of a bar.

London good delivery bars never leave their world of trusted refiners and custodians. If you take delivery of one of these, it looses its good delivery status and must be assayed before selling. That amounts to a premium you pay at the end. As long as these stay in accredited vaults, they trade at market prices. And its in a vault.

Gold coins in your possession is problematic. You can't eat them, and you can't use it at the grocery store. Most people would be reluctant to take one because they wouldn't know if it were real or not. Banks don't take them. So you have to find a dealer. Once you do that, people know you have gold. Better to keep it in a real vault, where you can sell small amounts and use the cash immediately.

Silver cons and bars are indeed a better option, if nobody will take paper money anymore.

Anonymous's picture

Hmmmm... the first 85% of your post is pretty much....well non-sense. The last sentence is half correct at best. And the third paragraph has a little bit of truth to it, but your suggested solution is garbage. So I guess if were to carry the 2 and round to the nearest whole number, your post is 99% non-sense. Ah screw it, your post is just nonsense in context to the article and the scenerio being discussed.

But the way you laid it out is so.... semi-professional... it looks pretty but it lacks substance. I smell a troll here.... or somebody that only read 5-6 lines of the article and decided that their supreme intelligence warranted them need to post.

nuinut's picture

Did you not read the post?

I'd stay anonymous if I was you.

BlackBeard's picture

hey, anyone have any news RE: project mayhem?  I kinda miss their hyperparanoid, yet backed by reputable news, source content. anyone?

Have they been taken by the MIB? vacation? swine flu?  planes, trains, automobiles into Federal buildings?

 

Any info would be appreciated.

 

Thanks,

 

BB

Mad Max's picture

Yes, another vote for missing Project Mayhem.  I'm assuming that one of the following happened:

1) Impromptu CIA-sponsored vacation.

2) Visit from MIB and decision that living another couple months was better than posting on ZH.

3) Found a way to make his updates subscription-only and get enough subscribers.

But I would definitely be interested to know which one.

BlackBeard's picture

Fuck! all three doors have shitty prizes behind them! The subscription one isn't so bad.