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It's Going To Implode: Buy Physical Gold - NOW
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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The little jackoff's mom must have left him alone with the computer again.
A real Stewie he is.
Maybe when he grows up and actually scores.
I posted this on an earlier thread and will add a comment at the end.
I own some gold and silver, but I have no doubt in my mind that if the currencies of the world tanks, it will be 1932 all over again but on a global scale. The next currency will HAVE to be backed with something. We will return to currencies backed by precious metals and guess what? They are going to confiscate my gold and silver and give me paper for it in the amount THEY deem it's worth. They will destroy the precious metal market by outlawing it's private ownership just like they did in 1932. Problem is that it will be done on a global basis so there won't be anywhere to hide it like back then. TPTB aren't going to allow me to profit while the majority of the population takes a haircut. Crazy? Maybe, but makes just about as much sense as many other theories I read.
Comment:
Yes, I will hide it but how do I ever spend it? Answer is I won't. It'll be like bartering with heroin and cocaine under new laws. I have lead too but comes the day I have to spend it, whether here in the city or my cabin in the mountains, it'll probably be time for lights out. To think that the world was destroyed by probably no more than a thousand people never having to fire a shot...
An excellent article Mr "Gordon Gekko", if a little breathless at times.
Nevertheless, this is an excellent summary of the problems lurking in the gold paper market. And others.
I agree with your conclusions and I will soon add to my physical gold holdings.
Hi, the guy at the door told me this is where I could pick up a couple tinfoil hats.
Interestingly, there is no guy at the door. Even more interesting, is that you ask for more than one hat. So this leads us to the question; have you ever wondered what it is like to make peace with yourself?
Welcome friend, we sure do have some tin foil hats for you! And they only cost 1 oz. of .999 fine silver! To appeal to our customer base, we have opted to allow our customers to trade metals such as copper, silver, or gold for our prime quality tin hats instead of trading with your valuable US $$. Get hats for your whole family, and get some for your friends! They make great center pieces for jokes at parties and you can even use them as cups to hold your favorite liquor! PARTY ON MY FRIEND!!!
GG.....WORD!
Thead music:
Final Countdown cello and orchestra:http://www.youtube.com/watch?v=IliwQImJrYE&feature=related
Superior
Don't listen to these naysayers, Mr. Bernanke. Just keep the booze flowing and VIKING FUNERALS FOR ALL MY FRIENDS!
MB= tripe. MB = back on IGNORE
MB is here to "rile us up". If he was not ignorant, his M.O. would be ruined! He thinks that this (ignorance) is bliss. I have news for you MB.....the quote "ignorance is bliss" was a misnomer. The real quote is "Follow your bliss." -JC
Spot on GG.
If and when the debacle cometh, the DTCC will hand the reddies over to the Feds - all 25 trillion or more of them, to do as they see fit. Us rubes who have our stash of equities in their respective IRA's, 401K's, our cash in CDs, TBTF Banks, will see it all evaporate with the blink of an electronic eye. "OH, Mr. Hooplehead, you had shares with UBS? Why, 'ah don't see yer name anywhere in our files and I 'speck that you jes' lost the whole kit and kaboodle…"
The bitch is that early withdrawal (sort of concomittant with premature stockulation) is costly. They get you before you put it in, get it when you pull it out, and pleasure be damned…
GG, another great post. The greater the incompetence of government, the more drastic actions we must take as individuals. People like Master Bates are in denial.
I don't agree. Physical gold will pullback substantially before shooting back up to the levels suggested and this is why:
1) Fed will finish buying up Treasuries via 3rd parties in an effort to mask failed auctions until just the right moment,
2) Fed will then collapse the Stock Market to scare everybody into buying their massive stockpile of worthless Treasuries and Dollars,
3) Fed or rather their owners, the primary shareholders, will then buy up all the crumbling Dollar denominated commodities on the cheap, including Gold,
4) Fed's owners will then and only then pull the plug on Treasuries and the Dollar,
It is at that point that Gold and all other commodities will skyrocket.
All of this action is very deliberately calibrated to collapse every currency, every government, and every nation on earth and concentrate power into only into a very few hands.
Nothing of the economic, financial, and political world we know today will survive. Nothing.
I think this has already happened. See Sept/Oct 2008.
This is also what I anticipate; a deep, and perhaps prolonged deflationary sag to force the liquidation of anything that still is worth anything (think physical assets like gold and land, not stupid paper assets of the sort that the world is flooded with), then once some large portion of the real wealth of the world has been vacuumed up, a final blowup of the fiat system that renders the common man completely destitute. Want food? Trade your guns and ammo.
There will always be those willing to serve higher masters by violently suppressing their fellow man; history shows this clearly. Hiring guns is never a problem. Think Xe / Blackwater. They'll be the only ones hiring, free 'roids.
I find this to be a very credible possible end game scenario....
while this 'game' plan reads plausibly, how do they protect it all, when the soldiers are more of/like us than them? at least on the scale proposed... feudal systems obviously had their knights, so the model isn't new, but to run the world, if the world doesn't want to be run? 6 billion irate boweevles (sp?) is a big number to control... picture fire-ants everywhere...
like Rome, i think the collapse will be over a much longer period, and death by a thousand cuts.
and I think GG is correct over the long-term. gold will oscillate, and in 20 years, it'll probably be worth an average worker's week again... in whatever the currency-of-the-week turns out to be.
Gold is a waste. If anything will collapse the price of gold will be unbearable High. And like predicted that every1 will rush into buying gold- it will take only a very short period of time before the price will be unreasonably high and not affordable to majority. Therefore having High price of gold that only few will be available to hold is not going to do any good to any country that will collapse with their debt.
We don't have enough physical gold to even cover the G20 debt ( forget about rest of the world).
Unless some1 will come up with a price regulation, i don't see how gold will play in the future.
Ah, so your argument against gold is it will be worth to much...so you normally turn down investments if in your mind if they will explode in value? I'm not saying it will or it won't but your position makes no sense. "No sir I only invest in assets that will not gain in value!"
Also there will always be trade, if it is worth that much then why not convert gold for land?
This is an ongoing emergency announcement to fellow citizens.
Everyone needs to get their money out of the "system" immediately, or it will be taken from you. This is simply a game to see who takes the loss first, and those in power will stop at nothing to make sure they don't take the loss. You will be forced to take a loss thru foreclosure or other seizure of property, increased taxation, currency devaluation, or all of the above. Repeat, if you have *money* anywhere in the system, it needs to be removed and put in a large anchored gun safe in your house. At least a portion (or all, depending on your preference) of your currency must be converted to physical gold, land, food stuffs, and gasoline, immediately.
I was trained as a jeweler many years ago. I am prepared as you would expect. Having heard about the possibility of altered gold bars, I did some digging. There was a verified incident in Germany ten years ago where a 500 gram bar was found to contain a tungsten core. The Hong Kong story (fall of 2009) has turned out to be false (maybe). At the age of 15 (1969) I was beginning to start investing and asked my grandfather (who raised me) which investor should I read about next and he replied Bernard Baruch. I thought about Baruch recently when I was wondering about the gold in Fort Knox. Bernard was very close to Wilson and F.D.R. (Churchill too). Go to Wikipedia and read all about him. I know there is plenty of evidence concerning questionable actions by the federal reserve and possibly others involving the U.S. gold, so I was wondering if anyone could have messed with our gold earlier. I have heard the rumors about chicanery in the 1990's. Thinking about the logistical difficulties in a Fort Knox switcheroo ( i.e. thinking as a criminal does) I came to realize that the best time to steal a good portion of the gold owned by the people of the most successful empire ever to have trashed the earth was at the time of confiscation of gold coin followed by meltdown and bar pouring. Baruch was a wealthy man by age thirty who bought a tungsten mine in California (atolia). While he owned a 17,500 acre estate on the coast of the Carolina's (where heads of state vacationed with him) he chose to stay one month each year from 1906 to 1926 at his tungsten mine in that small desert town (pop. 4,000). I guarantee you that as a smart Jewish fellow he was well aware of the fact that tungsten is just slightly under the density of gold and that a small addition of osmium or iridium could bring the density up to equal that of gold. Many successful families plan with strategies covering generations fully aware that things don't just happen, they are planned. A secure facility within a meltdown and pour operation site could have allowed for the switch out of bad bars for good at night with complicit personnel rewarded later by disappearance. On an entirely different subject regarding stock in mining companies....all our stock holdings are collateral for U.S. debt, therefore at a bankruptcy hearing convened by holders of U.S. treasury debt no longer willing to be lied to or injured by wanton destruction of value by over issuance of the currency such stock will be forfeited along with more than we are prepared to envisage.
I was trained as a jeweler many years ago. I am prepared as you would expect. Having heard about the possibility of altered gold bars, I did some digging. There was a verified incident in Germany ten years ago where a 500 gram bar was found to contain a tungsten core. The Hong Kong story (fall of 2009) has turned out to be false (maybe). At the age of 15 (1969) I was beginning to start investing and asked my grandfather (who raised me) which investor should I read about next and he replied Bernard Baruch. I thought about Baruch recently when I was wondering about the gold in Fort Knox. Bernard was very close to Wilson and F.D.R. (Churchill too). Go to Wikipedia and read all about him. I know there is plenty of evidence concerning questionable actions by the federal reserve and possibly others involving the U.S. gold, so I was wondering if anyone could have messed with our gold earlier. I have heard the rumors about chicanery in the 1990's. Thinking about the logistical difficulties in a Fort Knox switcheroo ( i.e. thinking as a criminal does) I came to realize that the best time to steal a good portion of the gold owned by the people of the most successful empire ever to have trashed the earth was at the time of confiscation of gold coin followed by meltdown and bar pouring. Baruch was a wealthy man by age thirty who bought a tungsten mine in California (atolia). While he owned a 17,500 acre estate on the coast of the Carolina's (where heads of state vacationed with him) he chose to stay one month each year from 1906 to 1926 at his tungsten mine in that small desert town (pop. 4,000). I guarantee you that as a smart Jewish fellow he was well aware of the fact that tungsten is just slightly under the density of gold and that a small addition of osmium or iridium could bring the density up to equal that of gold. Many successful families plan with strategies covering generations fully aware that things don't just happen, they are planned. A secure facility within a meltdown and pour operation site could have allowed for the switch out of bad bars for good at night with complicit personnel rewarded later by disappearance. On an entirely different subject regarding stock in mining companies....all our stock holdings are collateral for U.S. debt, therefore at a bankruptcy hearing convened by holders of U.S. treasury debt no longer willing to be lied to or injured by wanton destruction of value by over issuance of the currency such stock will be forfeited along with more than we are prepared to envisage.
Nice work. I appreciate the time you spent on this. BTW, judging form yesterday's COMEX action you can sense some real desperation.
.....keeping the crowds distracted with the stock market circus....
Now that's a great line GG.
actually money buried in your mattress turned out to be the investment in the 30's. (not many investment advisors will tell you to hoard cash). the problems with physical gold is that a small amount represents a great deal of value, and therefore it is easily pilferable, and is the target of counterfeiters. (no counterfeiter ever bothered making a five dollar bill) for average folks silver coins are probably better, and they come in usable denominations. the fiat currency collapse is more likely to be a slow motion train wreck, the people in charge know how to manage these things. at the end of the day some countries will issue gold backed currency, and that means gold mining stocks will prosper.
In the short term a stock market correction will put money back to work in bonds. See how that works.
I'm not sure even a complete meltdown in the paper gold market could make gold a viable alternative to cash. A paper gold market failure would send the POG to the moon initially, and the loss of confidence in markets would most likely be the catalyst for the next wave of the crash. However, a stratospheric price for gold would necessitate higher interest rates. The world cannot afford to move off the ZIRP anytime soon, so what is the solution for the Fed? Bailout the bullion banks as they are still TBTF, force settlement of all gold at an arbitrary price, and then make gold illegal to hold. They did it before and they'll do it again. GG, if your highly unlikely scenario unfolds, my strategy will be to short gold after the moon shot, but before the govt intervention. You may think it is not hard to imagine gold hitting $5000 in this scenario. I think it is even easier to imagine gold trading halted at $5000, followed by a week's holiday, followed by gold re-opening trading at $500.
You're aware that FDR devalued the cash in that period, right?!?!
A 10k stack of 100s is lighter but physically larger than 9oz of gold
unless you physically orphan the cash there is no way to devalue hard currency. (the fed has some plans to put time dated seals inside the money) but to my knowledge nothing FDR did physically altered the value of a dollar held across those ten years, but please inform me.. (point being if you lost half you net worth in a bank account, holding hard cash was preventative)
i suspect that money in 1930 was backed by gold ,,
now that paper is backed by a printing press
I love reading these types of articles, I think they are based mostly on sound information. But i've been reading them for 1.5 yrs now. So far nothing has happened. To boot, all of the crazy things that happen everyday now, i.e. corporate bankruptcies, states and countries going broke, any of which would have crashed the stock market 3 yrs ago, now just get ignored. The math says, the US will go broke. The math says, most banks are insolvent. The math says a lot of things negative. Is anything really bad ever going to happen ? I mean really ?
it's pretty hard to manage the wait...
my pop spoke of howard ruff in the 70s, harry browne, etc.
then i go back - randomly - to a dailyreckoning archive from 8 years ago, random day. could have been written today.
but i read these things because my gut has no trust in the guys at the wheel, given the hints we keep getting (thanks ZH).
"don't bet against the Fed" will only work for so long... i think the BRIC knows this.
i think something bad is going to happen, and having a bunch of insurance in an IRA/401K won't help nearly as much as more 'local' forms of insurance...
as with any insurance, i hope not to collect.
wow a full 1.5 years ,, an eternity lol
A man who leapt from a fifty story building proclaimed as he fell "so far so good." :-)
No one knows when, but it will happen.
Think of driving off a cliff. Before you drive off the edge, all is good. After you drive off, it's quiet and weird, but so far so good - you're still totally alive, all is well, hahaha. Then Mr. Earth comes up to meet you.
Or, think of the Titanic. Just a wee little itty bitty icecube. Not much leakage. Oh, the ship is listing. I'm sure they'll pump it out, no problem. Then, hours later, no more ship.
Ned has it right, as he so often does - Lead is a reasonable derivative bet on Gold. I prefer 00 and #2 12-gauge. You will need 1 kilo of ammo per 25 grams of gold when it hits $5000/oz.
The lead madmaxers are FOS.
GFD, take a look at MEXICO. It's right there on the border...do you REALLY THINK you have a chance in hell against those drug gangs OR the police?
Think about Afghanistan - YOU are going to defend YOUR plot against the Taliban or a local warlord?
Your ONLY chance is to join a larger group and be ready to freaking kill people who do not threaten you, IOW, be in the Mafia. Nobody ever won being The Postman...life is not SOCOM Strike Team Bravo.
If society REALLY breaks down, I don't care how many guns you have...GTFO. Take what you can carry and run. TWO ex military guys with even a smidgeon of small-unit combat experience will KILL YOU. Hell, look what that one crazy messican ex-marine did to the police in that one shootout caught on video.
Have YOU spent years drilling small unit combat? Do you know how to do bounding overleaps with a friend? Pieslice corners? How to advance under fire? Where to even shoot? How to peel retreat? These guys have all spent literally years practicing and drilling these techniques and tactics and many have actual experience in combat using them.
The police in that messican marine shootout had the dude outnumbered 10-1 and still they said he scared the hell out of them. Unless you are willing to shoot and kill people like a drug gang, you will be the one getting shot and killed BY them in madmax. If that nut would have had a friend, they would have killed all of the cops that eventually ended up cornering the guy.
In Argentina or other places where there still *is* a society, a pistol and shotgun are adequate, but there's no need for 100 million billion rounds of ammo, every conceivable gun...keep those to trade for food or toilet paper.
The lead TSHTF people have to hope that society makes it, and if so, gold is more value dense than weapons
You're about 50% right - and horribly hyperbolic on the rest.
It is well known that Greece is almost bankrupt. The Greek CB owns 112.2 tons
gold but I did not hear any intention to sell the metal to raise cash. WHY?
BTW, the physical gold trade seems to happen elsewhere. Swiss customs published raw gold import and export numbers for 2009:
Import of raw gold 2146.6 metric tons; export 990.9 metric tons raw gold.
The exports of refined gold are not mentioned in the piece.
Source (in German)
http://www.silberinfo.com/home/nachrichten/top-thema/detail-4/article/sc...
yeh gunther but i have questions. if greece does own this much gold and i have no reason to doubt it then i must ask. number 1. do they have physical possession of it , that is is the gold physically located in their central bank in athens or wherever? number 2. just how many of their gold bars are gold plated tungsten bars?
by the way gordo. how many of these "doorstops" do you think karl denniger has in his possession today? care to guess? i say zip, zero nada. he is a deflationista....just like mish shedlock and their little buddy over at kitco, nadler.....
Never been on Denningers forum, but have read his current writings and they seem spot on. Same For Shedlock, who does first rate analysis, IMHO.Shedlock is a deflationist because that is what the numbers support at this point in time.
Nadler's an idiot,haven't read anything by him in over a year now..
Willie, I am undecided on, comes off as a nutcase but I am beginning
to think he may have something
Well done GG
Hulk, same here. We may not like Denninger but he does the math, the thinking and tells the truth as best he knows it.
And to be honest he and many other truth tellers are probably on some government list.
I never thought i would be a terrorist, but by todays definitions in HLS i likely am.
Probably just warning people and buying gold will be against the law before too long.
What is more disturbing is that our leaders are willing to sell us out.
The only way to keep their power will be to silence us. How will they do that i wonder.?
I am more afraid of how they plan to keep us quiet than of any Mad max scenario. mad max i am ready for. Nukes and biologicals not so much. Remember these are the folks who used the stomach bomber to initiate new surveillance machines. Same folks hyped up H1N1 like it would be a calamity, they sold their drugs, made their money.
I would not put anything past these creeps.
As far as radiation detection goes, we bought a neutronics cdv-700 geiger counter, brand new
1960's model, for a hundred bucks.
This is the model you typically see in the old
sci-fi films.
Once you are able to monitor and measure radiation,in real time, its fairly easy to deal with.
Without the meter, you just don't know what the hell is going on until its too late.
The biological threats, we don't have much ability to deal with. Fortunately, due to our
remote location, the bilogical threat isn't
anything we have to worry about, too much
Denninger's a raving ego-maniac, the guy is seriously unstable, only sychophants are left on his forum. Mish is a much better analyst and more reasonable. Nadler works for the cartel, look it up, it's right there in plain sight. His job is to bash gold, period.
denninger, is schizophrenic, only half his brain works, but it works well, the other half, is an asshole.
yep . had a conversation with the dennenger person on e-mail.. he is an egomaniac .. has skills in reading financial statements taking them apart ARE excellent .
but zero understanding about having sex with gold lol
after a couple e-mails he puts you on ignore .. especially when he is frustraTED WITH OUT AN ANSWER ,,
Denninger is definitely a big douche. If you don't agree with him, he calls you stupid and bans you from his forum. He thinks it is impossible for the U.S. to print money, so it isn't going to happen. If you disagree you are stupid and banished.
What's more is he shamelessly cribs from others.
For example, got banned for arguing Peak Oil and then I see references to the Cantarell YoY declines that I used in the argument in subsequent tickers.
Told him the Fed would QE, he said they wouldn't, got banned for that once too I think lol and then I em'd him sayin I was right, you were wrong, so unban me. That went nowhere.
The forum is full of people who are would-be vultures, just like here, but who've chosen to side with the FRN. Everybody gotta place their bets, they placed theirs.
I know, but he's good at reporting stuff which is why I referred to him.