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John Williams Warns Of "Severe And Violent Sell-Off In Stocks"

Tyler Durden's picture


John Williams utters his most ruthless words of condemnation not only toward the Fed, but to everyone who is stupid enough to be chasing returns in the face of what is a hyperinflationary collapse.

Euphoric Inflation Insanity. Buying U.S. stocks because the Fed says it will proactively debase the U.S. dollar is like sitting on the beach in order to get a great view of an incoming tsunami. Any pleasure so derived should be short-lived, when the terror of underlying reality quickly takes hold.

If one were to view movement in the price of gold as a surrogate for anticipated inflation, for example, the issues begin to come into focus. Consider that last night's (October 14th) respective S&P 500, Dow Jones Industrial Average and NASDAQ Composite closing levels were up by 7.5%, 10.8%, 12.1% from a year ago, but the price of gold was up by 29.6% in the same period. Relative to gold, which tends to hold its purchasing power over time -- albeit sometimes in an anticipatory manner -- the S&P 500, Dow Jones Industrial Average and NASDAQ Composite have declined respectively by 22.1%, 18.8% and 17.5% year-to-year. This is against the prospective inflation environment being discounted by the gold market.

While stock prices do tend to rise in an inflationary environment -- where revenues and profits are inflated -- rising stock prices do not always stay ahead of inflation. On a constant-dollar or real, inflation-adjusted basis, stocks go through bull and bear markets, just as they do otherwise. If prices do not stay ahead of inflation, investors lose value in terms of the purchasing power of their assets. The equity markets may rally in the upcoming inflation, but the systemic implications and current gold behavior suggest that the circumstance will not give investors a positive real return, as discussed in the Hyperinflation Special Report.

Given the current systemic distortions and extreme irrationality in the equity markets, a severe and violent sell-off in stocks would not be a shock, and it could come with minimal, if any, warning. It also might be coincident with a U.S. dollar-selling panic.

There is particular risk of recent dollar selling -- which has been closing in on historic lows -- turning into an outright dollar-dumping panic, which not only would roil the domestic U.S. markets, but also would set the stage for a rapid acceleration of domestic consumer inflation. Irrespective of any near-term market volatility, gold and silver, as well as the stronger currencies, remain the best long-term liquid hedges against loss in purchasing power of the U.S. dollar.

For more, click here

We sympathize with John's sentiment, but who cares about risk? The Fed will never let anything drop in price ever again. It is now far too late to prevent the biggest bubble in the history of the world, and its subsequent collapse.


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Fri, 10/15/2010 - 16:11 | 653806 goldmiddelfinger
goldmiddelfinger's picture

Tell me when the rubber hits the road. Meanwhile I'm collecting hundred dollar nasdaq names.



Fri, 10/15/2010 - 16:24 | 653847 plocequ1
plocequ1's picture


Fri, 10/15/2010 - 16:25 | 653871 tunaman4u2
tunaman4u2's picture

That puts AAPL at what?

Its amazing that we NEED QE2 for this great depression but have enough cash to pay for internet on Iphone, Ipad & Imac.


Fri, 10/15/2010 - 16:44 | 653935 traderjoe
traderjoe's picture

Besides strategic defaulters freeing up cash by not paying their mortgage, there is some suspicion that consumers are going on one last credit splurge before they default on their credit cards. TD had an article on it a few weeks ago...

Fri, 10/15/2010 - 18:46 | 654290 FEDbuster
FEDbuster's picture

When in Rome.....

Fri, 10/15/2010 - 19:32 | 654380 flacon
flacon's picture

How do I post pictures on ZeroHedge? I see RobotTrader posting all sorts of pics of pin up girls but pics I want to post (serious pics) never show up. 

Fri, 10/15/2010 - 19:45 | 654414 tmosley
tmosley's picture

Only contributors can post pictures.  You'll have to settle for links.

Fri, 10/15/2010 - 19:54 | 654439 flacon
flacon's picture


Sat, 10/16/2010 - 10:12 | 654817 Rusty Shorts
Rusty Shorts's picture

Jesus Christ people, at least we still have Oksana, harden the fuck up already!

Sat, 10/16/2010 - 13:05 | 655197 kathy.chamberli...'s picture

the naughty little school girl look, works for you huh, shorts?

Sat, 10/16/2010 - 20:55 | 655748 New_Meat
New_Meat's picture

d o e s n ' t  m a k e  h i m  a  b a d  p e r s o n.

-- Ned

Tue, 04/26/2011 - 13:44 | 1208345 william.smith61
william.smith61's picture

Fuel Injector my toilet feed is slowed down by the large material deposited whenever I 'download' bran muffins. And I don't have the time to get off the toilet, walk over (with my pants at my ankles) and get the plunger. I hired this guy to set up my toilet feed and now I'm going to fire him because he put the plunger too far away to reach!


Fri, 10/15/2010 - 20:38 | 654513 Minion
Minion's picture

QE2 just keeps the US Govt from defaulting - that's the point. US Gov gets the fresh printings via bond purchases.  The moment a bond sale fails and interest rates go up, it's game over for USA Inc. 

Fri, 10/15/2010 - 21:35 | 654655 cbaba
cbaba's picture

Bond sales cannot fail. FED is selling to prime dealers where they are the owner of the FED. Its a rigged game, they keep interest rates low, give money from back door and they buy bonds from FED, that's the way they can decrease the interest to hypothetical levels. If there is a new sucker planning to buy a bond, Fed sells it with the same low rate they created artificially. If they see less suckers coming they will eventually increase the interest but bond auctions will never fail as the way you imagine..

Fri, 10/15/2010 - 22:39 | 654765 Minion
Minion's picture

It seems like you mean that FED will always monetize when bonds don't have enough bidders, via PD's, thereby choosing the slow route to hyperinflation vs. the quick route.  :D

Sat, 10/16/2010 - 11:11 | 655078 Landrew
Landrew's picture

When you have to print the money to fill the subscription of any auction that is one of the definitions of a FAILED AUCTION!

Sat, 10/16/2010 - 19:31 | 655653 Michael Victory
Michael Victory's picture

Speaking of money printing..

This month I interviewed another Von Mises Austrian, Robert Murphy.
The primary topic of our conversation: Sound Money & AU

Link to the interview:


Sat, 10/16/2010 - 23:10 | 655875 i-dog
i-dog's picture

Excellent interview. Thanks. I really liked his dispassionate analyses ... and his "They have no exit strategy! [to all the printing] ... other than the IMF offering a [pseudo-?] gold-backed replacement".

Sat, 10/16/2010 - 19:59 | 655691 DrStrangelove
DrStrangelove's picture

no, this only means a failed auction will happen if the game riggers (fed owners) care to let it happen, trust me the world ablidge.

Sat, 10/16/2010 - 22:17 | 655826 rosiescenario
rosiescenario's picture

Right on point.


Sat, 10/16/2010 - 06:09 | 654897 deez nutz
deez nutz's picture


you got to have the "i"s to go along with all those new subprime GM vehicles hitting the road. 

Call it the "i-onstar" generation.

Fri, 10/15/2010 - 16:25 | 653872 tunaman4u2
tunaman4u2's picture

That puts AAPL at what?

Its amazing that we NEED QE2 for this great depression but have enough cash to pay for internet on Iphone, Ipad & Imac.

Fri, 10/15/2010 - 17:11 | 654027 snowball777
snowball777's picture

The more people like Harry Wanger there are, the less Apple needs people to actually buy their products, eh wot?

Fri, 10/15/2010 - 18:40 | 654276 HarryWanger
HarryWanger's picture

I don't own any AAPL right now. I sold at 289, got lucky enough on the Cook rumour to buy again at 275 and sold at 290. I only have precious metals right now. 

I repeat, if somehow Apple doesn't knock it out of the park again, you might see this sharp sell off described here on Tuesday. But, seeing how AAPL is TBTF, I can't see how that would happen. 

Fri, 10/15/2010 - 21:58 | 654691 espirit
espirit's picture

Harry- As part of the team, you weren't supposed to sell AAPL until it hit 310, and put the profit into PM's to keep them pumped. Now what are we going to do?

Repeat, I repeat do not sell GOOG yet until gold is set for a major - MAJOR correction!

Sat, 10/16/2010 - 06:19 | 654899 deez nutz
deez nutz's picture


you got to have the "i"s to go along with all those new subprime GM vehicles hitting the road. 

Call it the "i-onstar" generation.

Fri, 10/15/2010 - 16:31 | 653889 desk-jockey
desk-jockey's picture

for REAL. sorry, but been hearing the same shpiel here day...after day...after day...after day. Yep, WE GET IT. You understand fundamentals. Fundies are EXSTINCT. Y'all can't get a grip on the wholly fake bullshiat of today?!? So yeah - it's gonna collapse. UNLESS IT DOESNT because it is RIGGED. /out, been out, MAD staying thr F out....

Fri, 10/15/2010 - 17:25 | 654067 desk-jockey
desk-jockey's picture

ohhh you're shaking your tiny fist at me wuth your junks. wahhhh!!!! so, exactly how is what i said wrong? i love ZH. have been here since it was a wee blog. have mad respect fir the folks brave enough to create and maintain this place. for the rest of y'all? convince me there is ANY reason to believe it's ANYTHING but bullsit. THEN i will understand or at least TRY to understand how any of you can still make calls one way or the other. It's an ASS RAPING SHAM.

Fri, 10/15/2010 - 19:32 | 654382 WaterWings
WaterWings's picture

Plus one, dude.

I'm pickin' up what you're puttin' down.

Fri, 10/15/2010 - 19:37 | 654392 Squid-puppets a...
Squid-puppets a-go-go's picture

I'll unjunk ya

Coz i kinda agree - the system is fkd, endemically corrupt and teetering on the edge of oblivion. But i was waiting years longer for the derivatives thing to blow up than i first thought, and it makes me think that many on ZH underestimate the power of vested interests to prolong the bullshit. I also think that the inflationary effect of QE is a much different prospect for a global fiat currency than for , say, the economically quarantined (by equivalent) weimar replublic. The whole world can soak up the 'too much money chasing to few goods' precursory dynamic.


I WANT it all to collapse tomorrow. I just think it will take another few years to really play out in full

Fri, 10/15/2010 - 23:30 | 654840 zaknick
zaknick's picture

I agree it might take years for the murderous regime to collapse but it's fun to gleefully cheer on while spectating their demise in real time. I also happen to know for a fact that, with or without oil, America will be a much healthier (spiritually) and all around better place without the current thugs in power and their completely (unConstitutional) centralized form of coercion, er I mean governance. So will the world.

Sat, 10/16/2010 - 06:29 | 654902 Snidley Whipsnae
Snidley Whipsnae's picture

I'm rereading Gibbons 'Fall of the Roman Empire'... It's amazing how long a totally rotten, discredited empire can continue on sheer momentum.

And the Roman's did not have the benefit of a world reserve currency.

If America follows a similar path as Rome the next steps are a string of outright kings/dictators sans elections and then many small and large revolts of the US military, total lack of moral courage by citizens, followed by economic demands (in gold) by potential invading bands from abroad.

Some of these events are happening now, some to come, and it all takes time to play out.

I have no clue how long it will take the US to unravel. Rome, from the time of the end of the republic to the end of the last dictator took several hundred years. I suspect it will happen much faster in the US because of world's debt based fiat currency system and 'innovative financial products'.

In addition, Rome had the benefit of an occasional great leader during it's emporer period...we, otoh, have had a string of total fuck ups and I see no chance of a real leader coming to power in the US unless the two party system loses it's strangle hold on government and the banking cartel is busted up...unlikely without a significant uprising of the people.

Reading Gibbons now vs reading Gibbons when I was in my twenties...What a dramaticly different take I have on Roman history now. Eeriely similar to what I see happening daily in the US.

Fri, 10/15/2010 - 20:59 | 654570 Drachma
Drachma's picture

Pull yourself together man. If I had a rubber hose...

Fri, 10/15/2010 - 22:52 | 654792 chopper read
chopper read's picture


Fri, 10/15/2010 - 20:41 | 654524 Minion
Minion's picture



Since I presume you can trade like you type (Mad Quik, Yo) why not daytrade long and enjoy the monetization?  You should be able to get out if it starts to crack, with those skillz.

Sat, 10/16/2010 - 08:39 | 654947 aheady
aheady's picture

ba ha ha ha

Fri, 10/15/2010 - 22:37 | 654763 chopper read
chopper read's picture

equivalent to picking up dimes in front of a steamroller.  

...worked for Long Term Capital Management, until it didn't.  

Sat, 10/16/2010 - 23:19 | 655888 Saxxon
Saxxon's picture

The event we shorts are looking for may be AAPL rolling over on their unquestionably, assuredly greatest best beat ever earnings after Monday close. 

So wonderful their Q3 and their guidance will be, exceeding even the most sanguine expectation and raining easy money on their legions of faithful holders and supporting the SPY and NAS at nosebleed levels.

AAPL, the sure thing.

Fri, 10/15/2010 - 16:11 | 653809 sysin3
sysin3's picture

Endgame, bitchez.   But the timing is soo problematical.

Fri, 10/15/2010 - 16:19 | 653853 midtowng
midtowng's picture

The market can stay irrational longer than you can stay solvent.

Fri, 10/15/2010 - 17:34 | 654100 caramel55
caramel55's picture

Until the market becomes 'rational', if ever, I'm out.  

Fri, 10/15/2010 - 19:05 | 654334 FEDbuster
FEDbuster's picture

People say I'm crazy doing what I'm doing,
Well they give me all kinds of warnings to save me from ruin,
When I say that I'm o.k. they look at me kind of strange,
Surely your not happy now you no longer play the game...

John Lenon, Watching the Wheels

Fri, 10/15/2010 - 22:55 | 654797 chopper read
chopper read's picture

i'm just sitting here watching the wheels go round 'n round (in gold).  I really love to watch them go (in gold).  

Fri, 10/15/2010 - 17:58 | 654160 Fred Hayek
Fred Hayek's picture

And that man KNEW irrational.

Fri, 10/15/2010 - 17:08 | 654011 SWRichmond
SWRichmond's picture

But the timing is soo problematical.


Fri, 10/15/2010 - 16:11 | 653810 redpill
redpill's picture

Does this mean buy AAPL?

Fri, 10/15/2010 - 20:45 | 654535 Minion
Minion's picture

Are the banksters buying AAPL?  :D

Fri, 10/15/2010 - 16:12 | 653814 Lord Peter Pipsqueak
Lord Peter Pipsqueak's picture

Yes it certainly looks like it's going to crash any minute......anyone care to measure the angle of ascent from 3.30 onwards -about 89.999 degrees?

Fri, 10/15/2010 - 16:15 | 653827 His Dudeness
His Dudeness's picture

I got 89.998576

Fri, 10/15/2010 - 18:15 | 654206 EscapeKey
EscapeKey's picture

Try using a double instead of float.

Fri, 10/15/2010 - 22:00 | 654699 UGrev
UGrev's picture

accuracy bitchez  :)

Fri, 10/15/2010 - 22:54 | 654796 Arkadaba
Arkadaba's picture


Sat, 10/16/2010 - 16:23 | 655488 theopco
theopco's picture


Fri, 10/15/2010 - 16:12 | 653815 Chartist
Chartist's picture

Until Apple reaches it's preordained target of $350, this market will not tank.....So say's the pope.

Fri, 10/15/2010 - 16:13 | 653822 goldmiddelfinger
goldmiddelfinger's picture

When Gil Amelio was CEO of AAPL the entire market cap was worth less than today's price change.



Fri, 10/15/2010 - 17:00 | 653992 Stuck on Zero
Stuck on Zero's picture

Gil Amelio couldn't have been that bad.  If he were he'd be running for governor in California.

Fri, 10/15/2010 - 17:07 | 654010 mynhair
mynhair's picture

He isn't?

Fri, 10/15/2010 - 16:22 | 653862 Spalding_Smailes
Spalding_Smailes's picture

Lets just wait and see the bond/debt/credit market reaction to Q.E. 2 and the fine print.

The stock market is a fly on a horses ass in regards to mr. credit, and when he starts spitting up blood again, uncle ben and his pomo will get steamrolled ...

Fri, 10/15/2010 - 16:50 | 653958 barkster
barkster's picture

market crashes after election;

everyone's retirement account tanks;

hysteria whipped up by msm prevails;

lame-duck congress passes qe2;

lame-duck implements massive overhaul (aka confiscates retirement accounts);

banksters buy sell-off on the cheap;

hyperinflation kicks in;

i snack on my dried/canned food as i sit on my sofa with my gun and count my gold and watch riots on satellite tv (since msm will not be covering them).

Fri, 10/15/2010 - 16:55 | 653971 Internet Tough Guy
Internet Tough Guy's picture

Try the dried apricots; they are delicious.

Fri, 10/15/2010 - 17:58 | 654161 Boop
Boop's picture

Not too many dried apricots, though, unless you have sat tv in the bathroom.

Fri, 10/15/2010 - 19:55 | 654445 SPONGE
SPONGE's picture

UPS just delivered my $1000 worth of dehydrated food stock. I can sit in the bathroom as long as I want, but don't have tv.

Next up, need to get a coffee roaster so I can buy and store 50 lb. bags of raw beans. I be buzzed for, like, forever.

Fri, 10/15/2010 - 20:40 | 654521 Mad Mad Woman
Mad Mad Woman's picture

Did you buy it from Costco?  I see they are selling that stuff now.  Well at least someone is ready for the endgame. :-)

Fri, 10/15/2010 - 22:01 | 654700 sourgrapesson
sourgrapesson's picture

Yeah Costco has one bucket of emergency food supply all right --one of the buckets they sell consists of nothing but extremely high sodium soup packages with a 20 year shelf life.  Now as long as you have fire and water your good to go for 200 days for 1 adult.

Holy crap the salt will kill ya!


Sat, 10/16/2010 - 06:37 | 654904 Snidley Whipsnae
Snidley Whipsnae's picture

Try the dried, pitted dates...also, the 'golden rasins' are terrific. Either work well in oatmeal or oatmeal cookies. Throw in some walnuts or pecans and you have a meal. Nice change from sardines and crackers!

Sat, 10/16/2010 - 20:59 | 655753 New_Meat
New_Meat's picture

Teresa Kerry likes them soaked in gin.

- Ned

Fri, 10/15/2010 - 16:57 | 653977 melachiro
melachiro's picture


Pass the jerky and homebrew.

Fri, 10/15/2010 - 16:59 | 653984 barkster
barkster's picture

YIKES! I am not as prepared as I thought! No homebrew!!

Fri, 10/15/2010 - 17:00 | 653993 barkster
barkster's picture

I feel better...

Just ordered some of this:

Fri, 10/15/2010 - 18:41 | 654278 largowinch
largowinch's picture

Now, that is what I call a solid investment barkster!

Fri, 10/15/2010 - 19:14 | 654345 FEDbuster
FEDbuster's picture

Thanks for the link.  Adding a few kits to the preps.  Hard cider will be nice to have.

Fri, 10/15/2010 - 21:19 | 654613 Hulk
Hulk's picture

Just add creek...

Fri, 10/15/2010 - 20:08 | 654465 DocLogo
DocLogo's picture

that's pretty ghetto. But not a bad as these

Sat, 10/16/2010 - 20:36 | 655729 tip e. canoe
tip e. canoe's picture

ghetto is the new green

Fri, 10/15/2010 - 17:19 | 654047 Cheesy Bastard
Cheesy Bastard's picture

+ Mossberg 590

Fri, 10/15/2010 - 17:53 | 654148 Rahm
Rahm's picture

500 pistol grip, with a Rem870 and Benelli M1 Super 90 for backups :)

Fri, 10/15/2010 - 17:59 | 654164 Cheesy Bastard
Cheesy Bastard's picture

If you can't solve a protection problem with that and some double ought buckshot, the problem may be unsolvable!  Nice! :)

Fri, 10/15/2010 - 18:17 | 654215 melachiro
melachiro's picture


Sorry, in a pendantic mood but, agree completely!!!

Fri, 10/15/2010 - 18:19 | 654221 Cheesy Bastard
Cheesy Bastard's picture

I stand corrected! :)

Fri, 10/15/2010 - 20:18 | 654487 PhattyBuoy
PhattyBuoy's picture

Hey ... a Cheeky wannabe / impostor !!

Member for 6 days 21 hours.
Sat, 10/16/2010 - 17:50 | 655564 AccreditedEYE
AccreditedEYE's picture

+1 Indeed. I miss the genuine article... That dude was as sharp as a nano-honed razor.

Sat, 10/16/2010 - 20:17 | 655714 AssFire
AssFire's picture

Cheeky would not have misspelled -aught-.

Sat, 10/16/2010 - 22:33 | 655848 rosiescenario
rosiescenario's picture

...might I suggest 12 GA. Flechette Shot Shells....buckshot is so some of the latest loads from dragon's breath to strung balls...

Sat, 10/16/2010 - 18:41 | 655613 Bendromeda Strain
Bendromeda Strain's picture

Pistol grip? Might I recommend the Knoxx Breachers Grip? Is nice, even with slugs...



Fri, 10/15/2010 - 20:42 | 654525 Mad Mad Woman
Mad Mad Woman's picture

Can you get the laser sight on that?  I want one with a laser sight. Pretty cool stuff.

Fri, 10/15/2010 - 22:25 | 654750 Cheesy Bastard
Cheesy Bastard's picture

Bayonett lug is standard on the590...Just sayin'...

Fri, 10/15/2010 - 17:31 | 654084 whatsinaname
whatsinaname's picture

but timmay said the market would never crash ?

Fri, 10/15/2010 - 20:49 | 654543 Minion
Minion's picture

Pretty much the same thing the Elliot Wavers say - get out and go to cash.  All the minor flash crashes lately seem to show how thin the market really is.  It just takes one big sell order to trigger all the stops....

Fri, 10/15/2010 - 17:20 | 654050 There is No Spoon
There is No Spoon's picture

apple reports earnings monday after the bell, probably another miraculously managed beat plus great maybe it hits 350 on tuesday or wednesday?

Fri, 10/15/2010 - 19:17 | 654348 FEDbuster
FEDbuster's picture

Booking Verizon profits this quarter.  Vaporearnings, accounting rules be damned.  Just hire a Walmart clerk to sign off on it.

Fri, 10/15/2010 - 17:40 | 654115 A_MacLaren
A_MacLaren's picture

I think you're looking at the wrong target.

Not AAPL, it is GOOG.

GOOG 666 is the market top and when the ultimate evil is unleashed upon equity investors.

Fri, 10/15/2010 - 18:03 | 654177 shushup
shushup's picture

Apple has much higher price targets than that now. 400-500.

I agree market will not roll over until at least tech earnings are over or Nov. 3.

Fri, 10/15/2010 - 18:46 | 654289 HarryWanger
HarryWanger's picture

Apple seems to be in a bit of panic IMO right now trying to force a fad, iPads, down everyone's throats selling them everywhere that has empty shelf space. They've lost market share to Android that will make the iPhone a niche player when all is said and done.

Market rolls over when AAPL does. If we don't see a blowout, and I'm talking blowout, Tuesday could be a killer.

Fri, 10/15/2010 - 20:04 | 654458 DosZap
DosZap's picture

Apple got smart, deal working w/ Verizon.AT&T, no longer sole Dog.

Dummm dee dummmm duummmm.

Sat, 10/16/2010 - 19:13 | 655642 geminiRX
geminiRX's picture

I would love throw a put at apple, but I have been raped enough trying to short this market. Just gold now.

Fri, 10/15/2010 - 16:13 | 653821 John McCloy
John McCloy's picture

Very intersting. Dylan Ratigan is discussing with Congressman Garamendi on MSNBC regarding peering into the MBS BS that the Federal Reserve bought along with Fannie & Freddie and taking these toxic assets that were originated upon fraud and RETURNING them to the banks and off the taxpayer backs.

  Sounds like a plan. 

Fri, 10/15/2010 - 16:45 | 653941 traderjoe
traderjoe's picture

Chris Walen thinks the put-backs will bankrupt the banks in 2011. Check out the interview at King World News. Interesting stuff...

Fri, 10/15/2010 - 20:08 | 654466 DosZap
DosZap's picture

"will bankrupt the banks in 2011"

No bout a doubt it................

Fri, 10/15/2010 - 22:13 | 654728 espirit
espirit's picture

Whalen's a smart dude, probably one of the best. He calls the crew at CNBS "kids".

Sat, 10/16/2010 - 06:42 | 654907 Snidley Whipsnae
Snidley Whipsnae's picture

Whalen is right. I listened to that KWN interview several times and dropped it in favorites. A put back to banks would be end game.

Sun, 10/17/2010 - 08:47 | 656311 Hephasteus
Hephasteus's picture

11/11/11 Chronus's balls have a date with the sickle. Do we crash during 10/10/10 or do we just rapidly spiral decline is the question. But the balls are coming off the government's projecting dick is getting punched into a receptive pussy.

Sun, 10/17/2010 - 12:55 | 656674 kathy.chamberli...'s picture

i like your vivid description, very colorful thanks.

Fri, 10/15/2010 - 20:12 | 654479 Bob
Bob's picture

He was hammering that angle yesterday as well.  He's on a mission to get bad RE out of gov backed programs and back to banksters. 

Fri, 10/15/2010 - 20:44 | 654532 Mad Mad Woman
Mad Mad Woman's picture

Like that will ever happen.

Fri, 10/15/2010 - 16:13 | 653823 The Continental
The Continental's picture

What does John W. say about PM mining stocks in a hyperinflationary stock sell off? Will they suffer price declines too? Or, will they rally ahead of gold and silver bullion?


Inquiring minds want to know!

Fri, 10/15/2010 - 16:16 | 653836 Ragnarok
Ragnarok's picture

Depends, how much debt does that miner have to roll?  If credit markets freeze up again equity shareholders could lose out.

Fri, 10/15/2010 - 16:17 | 653844 redpill
redpill's picture

Why not just buy the Australian ones and get double your pleasure? 

Fri, 10/15/2010 - 16:22 | 653864 tmosley
tmosley's picture

Expand your set of probable options.

Government will likely seize them, either directly via nationalization, forced buyout with depreciating dollars (the three weeks it takes to process your check will leave you with enough to buy a donut and a cup of coffee), or otherwise the mine may stop operating, as they can't afford the energy and labor required.

There is no way to know what will happen to mining shares.  You are best off using them for speculation and nothing more.  If you are relying on them for income, forget about it.  Sell them and buy bullion.  

For what it's worth, I sold out of all of my mining shares last year and bought metal instead.  Though I haven't made quite as much as I could have (I think SVM has doubled since I sold it), I sleep a lot better at night.

Fri, 10/15/2010 - 16:48 | 653955 Gloomy
Gloomy's picture

Are you a metallurgist? How do you know your coins are real? Where will you store it so you aren't robbed? How ya gonna keep from being robbed or killed when you come back from the post office, having delivered your heavy package? How ya gonna be liquid in an emergency?

Fri, 10/15/2010 - 16:58 | 653980 Internet Tough Guy
Internet Tough Guy's picture

Calipers and a digital scale will tell you if your coin is legit; I have never seen a fake. Do you think stocks are more liquid than gold bullion?

Fri, 10/15/2010 - 18:14 | 654203 Gloomy
Gloomy's picture

Good question. But what are the alternatives:

1. Physical-Are you a metallurgist? How do you know your coins are real? Where will you store it so you aren't robbed? How ya gonna keep from being robbed or killed when you come back from the post office, having delivered your heavy package? How ya gonna be liquid in an emergency?

2. Perth Mint, bullion banks, Sprott. Do they really have it? Will they just steal it?

3. GLD, SLV-Fogettaboutit!!

4. Mining stocks-Will the mine be taken as emminent domain? Will the stocks crash during a meltdown?


Pick your poison-ain't no good choices! Yet choose you must. I split between mining companies and physical.

Fri, 10/15/2010 - 19:20 | 654354 FEDbuster
FEDbuster's picture

I randomly test my brass and lead investments most weekends.  So far no fakes, everyone of them goes boom.

Fri, 10/15/2010 - 19:55 | 654444 flacon
flacon's picture

MAY 6TH is the STANDARD, not October 2008. What ever your stocks did on May 6th they will do again. 

Sat, 10/16/2010 - 10:32 | 655046 Founders Keeper
Founders Keeper's picture

[I randomly test my brass and lead investments most weekends.  So far no fakes, everyone of them goes boom.]

And that solves your "liquidity" and "what if someone robs you" problems.

(Good post, FEDbuster)


Sat, 10/16/2010 - 07:09 | 654914 Snidley Whipsnae
Snidley Whipsnae's picture

I continue to hear the same stupid questions over and over again...

'How are you going to store it? Protect it?'

Intelligent people have been protecting their gold/silver for over 5,000 years. Are you so lacking in imagination that you cannot protect your own assets? If so, you are the dream that the banksters have been working so diligently to create.


Sat, 10/16/2010 - 08:53 | 654962 Ancona
Ancona's picture



I hear the same stupid dialog. Where is mine? None of your damn business.....that's where!

Sat, 10/16/2010 - 21:02 | 655758 New_Meat
New_Meat's picture

What are you talking about...?

Fri, 10/15/2010 - 18:06 | 654185 Double.Eagle.Gold
Double.Eagle.Gold's picture

For bullion, you might consider one of the FISCH kit's. These handy little measuring devices come in kits that measure size and weight for known-good gold bullion. As a Dealer, I use the FISCH as a first line of defense and trust it. Calipers and a very sensitive scale are also very good.

When Trust Matters

Fri, 10/15/2010 - 19:18 | 654351 flacon
flacon's picture

I'm glad you used the term "Trust" and not "Faith". I'm all about "faith'd-out" about now. I don't have faith in gravity but I trust it.

Fri, 10/15/2010 - 19:52 | 654435 tmosley
tmosley's picture

No, but I am a chemist.

Flip them in the air.  Silver coins ring nicely, fake ones don't.  Gold deforms under a fingernail, but is extremely dense and heavy for its size.

I have a nice safe that is bolted to the foundation.  You would need a sherman tank to get it out without the combination.

Label as "machine parts", or don't buy in huge bulk. 

Everyone wants gold and silver, so it's quite liquid.  If nothing else, there are numerous coin and/or pawn shops that will give you a price that is "good enough" for an emergency, and certainly a lot more than you paid.

Now a question for you:  what are you going to do when you wake up one day and your paper isn't worth anything?

Fri, 10/15/2010 - 20:46 | 654536 Mad Mad Woman
Mad Mad Woman's picture

Answer to the question: use it for toilet paper.  Heh heh.

Fri, 10/15/2010 - 17:11 | 654023 barkster
barkster's picture

went to my "dealer" two days ago - biggest crowd i have ever seen there in 7 years of going there. lots of asians... also, they were out of almost everything i wanted...

Fri, 10/15/2010 - 18:24 | 654233 cossack55
cossack55's picture

You forgot the cost of redeploying all the troops (trainers? no more troops) from Afgan to the mines. Add support for said troops and the costs go high.  May require 7 or 8 ounces of the shiney at then current rates.

Fri, 10/15/2010 - 23:46 | 654856 chopper read
chopper read's picture

FYI - tmosley,

“I learned from George Schaefer that big bull markets almost always end with a speculative explosion. We had not seen that kind of action in the bull market that started in June, 1949. I was convinced that a speculative third phase of the bull market lay somewhere ahead. For that reason I was convinced that the bull market was not over.”


“Today I am taking the same stand regarding the gold bull market. The gold bull market will not end with a fizzle and a whimper. It will end with intense speculation and widespread interest from the funds and the public. We haven't seen that kind of activity yet, but I'm convinced that a period of wild speculation in gold lies somewhere ahead.”


“This is why I continue to beg my subscribers to load up with gold. As I see it, we are nearing a period of intense speculation that will be beyond anything seen before by the last three generations of Americans. Ironically, more money (will be) made in the final explosion in gold than was made during the first two phases combined.”


“Great bull market are seen maybe once or twice in a lifetime. The current "stealth" gold bull market has sneaked up on most Americans. The very phrase, "gold bull market" is sneered at by most analysts today. In fact, most of the comments on gold today come in the form of warnings; "Gold is too high." "Gold is in a bubble." "Gold will sink back below 1000." "Gold is a fool's play." 


“Nonsense. Gold is moving ever-closer to it's climactic speculative third phase. The negative comments about gold will only serve to make the gold bull market that much stronger. In this business, there is nothing more powerful than a primary bull market that has been denigrated, spat at, and held back for years.”


...exactly my thoughts.  


as for "mining stocks", they will sell off in a 'liquidation of all paper' panic, but will likely recover to a 'reset' value for those who are liquid enough to weather the storm.  

Sat, 10/16/2010 - 07:16 | 654917 Snidley Whipsnae
Snidley Whipsnae's picture

How can gold be in a bull market when it is simply reflecting the weakness of the dollar and other fiat currencies that are being printed to infinity?

Gold will stabalize only when people are convinced that currencies are relatively stable once again...and, we are a hell of a long way from stable currencies now.

Gold isn't in a bubble...the currencies are in a bubble collapse.

Sat, 10/16/2010 - 13:57 | 655266 chopper read
chopper read's picture

we have only one example of fiat currency collapse being headed off.  Paul Volcker raising rates to 20% in order to protect the brand-name.  Why would I convert my $1,000,000 to gold when I can make $200,000 in interest, even if inflation is also 20%.  As long as my living expenses are less than $200,000 then I am ahead of the 'inflation' wave and adding to my fiat stash.  Thus, fiat becomes attractive again when short-term rates of return reflect rates of printing.   

However, in a world where rates of return are far below rates of printing, why NOT exchange my fiat for gold?

The question is: How soon will Bernanke raise rates to 20% in order to make fiat attractive again?


...i can almost here you laughing through the fiber optic line.  


Sat, 10/16/2010 - 19:18 | 655645 geminiRX
geminiRX's picture

20% - he can't do it. The only road left to take is negative interest rates....don't laugh either as the Fed may force you to spend.

Sat, 10/16/2010 - 19:27 | 655652 akak
akak's picture

In that event, the Fed will be forcing a whole lot more people to buy precious metals, and commodities in general.

Sat, 10/16/2010 - 23:09 | 655877 geminiRX
geminiRX's picture

I like your line of thinking:) 

Hi ho...silver, gold and oil!

Sat, 10/16/2010 - 19:43 | 655667 cxl9
cxl9's picture

If negative interest rates don't work, maybe eventually we'll see some sort of bizarro-world martial law. Instead of imposing curfews, the national guard troops will be deployed to go door-to-door and pull people from their houses, transport them to the malls, and force them at gunpoint to purchase things. Shop or die, citizen.

Sun, 10/17/2010 - 00:09 | 655944 chopper read
chopper read's picture

exactly.  in other words, the writing is on the wall.  Bernanke ain't no Volcker, nor could he be with our trade deficit and foreign debtholders. 

this precious metals trend is going to keep its legs for some time, perhaps beyond this current fiat structure.

Fri, 10/15/2010 - 16:29 | 653885 Gloomy
Gloomy's picture

Good question. But what are the alternatives:

1. Physical-Are you a metallurgist? How do you know your coins are real? Where will you store it so you aren't robbed? How ya gonna keep from being robbed or killed when you come back from the post office, having delivered your heavy package? How ya gonna be liquid in an emergency?

2. Perth Mint, bullion banks, Sprott. Do they really have it? Will they just steal it?

3. GLD, SLV-Fogettaboutit!!

4. Mining stocks-Will the mine be taken as emminent domain? Will the stocks crash during a meltdown?


Pick your poison-ain't no good choices!


Fri, 10/15/2010 - 17:00 | 653983's picture

Physical-Are you a metallurgist?

Gold was money for five thousand years until the twentieth century. That only worked because every human being alive in that period was a metallurgist.


Where will you store it so you aren't robbed? How ya gonna keep from being robbed or killed when you come back from the post office, having delivered your heavy package?

Gold was money for five thousand years until the twentieth century. That only worked because during that period every human being had an impenetrable force field.


How ya gonna be liquid in an emergency?

Gold was money for five thousand years until the twentieth century. That only worked because during that period there were no emergencies.

Gold can not be used as currency today because this time it's different. We are not nearly as advanced as those guys from B.C.

Fri, 10/15/2010 - 17:11 | 654025 SWRichmond
SWRichmond's picture

I think that about covers it.

Fri, 10/15/2010 - 17:32 | 654089 redpill
redpill's picture


Fri, 10/15/2010 - 17:49 | 654140 The Alarmist
The Alarmist's picture

Actually, you can eat it.  People ate it all the time in the middle ages. Some still do.

Sat, 10/16/2010 - 19:20 | 655646 geminiRX
geminiRX's picture

You can inject it intramuscularly too - for rheumatoid arthritis

Sat, 10/16/2010 - 23:14 | 655882 geminiRX
geminiRX's picture

It can also help you eat......if you have a cavity to fill.

Fri, 10/15/2010 - 18:25 | 654236 Cecil Rhodes
Fri, 10/15/2010 - 18:16 | 654210 Gloomy
Gloomy's picture

I'm simply trying to point out there are potential problems with all forms of ownership. I think picking more than 1 is prudent

Fri, 10/15/2010 - 19:14 | 654346 abducens
abducens's picture

Health care law requires a 1099 to sell gold or silver , is that true? Govt will know exactly what you got!!

Fri, 10/15/2010 - 19:25 | 654360 flacon
flacon's picture

"requires".... that's the key word there. I don't intend on paying any capital gains taxes for my metals. In fact I believe that it is IMMORAL to pay those taxes and people that DO PAY THEM ought to be shot because they are traitors; so I won't pay them. And a nice big "Fuck You!" to the "govern-men". You can't get me! I won't pay you! 

Fri, 10/15/2010 - 21:22 | 654617 Pining for the ...
Pining for the Fjords's picture

Just FYI, I suspect every word typed on ZH, the most fundamentally subversive financial site on the net, is being cached somewhere for later reference.  By somebody. In case they want to do something. I may be nuts, but I have my suspicions.

  I like where your head's at, but personally I'm not announcing shit about what I may or may not do.

Fri, 10/15/2010 - 22:17 | 654730 flacon
flacon's picture

Well I am. And I am going to personally take Zbig to his gallows along with Kissinger and it's about time that we stop being TERRORIZED by paper tigers. Do you really believe that the GOVERN-MEN can come collect you?! They are MUCH MORE AFRAID of us than we are of THEM! 

Sat, 10/16/2010 - 13:04 | 655196 BrosMacManus
BrosMacManus's picture

I agree about the immorality of it, but dude, that was the ONLY way they got Capone....

Sat, 10/16/2010 - 09:06 | 654959 OldTrooper
OldTrooper's picture

I'm with you, Pining.

The walls have ears.  Some things are best said only in private, among trusted friends.  Also, it's not unheard of for agents to agitate in the hopes of drawing out evidence. 

It's hard to convince the young and passionate, though.  See how a master deals with it:

Let us hope that the young abandon their reckless ways before it is too late.

Do NOT follow this link or you will be banned from the site!