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Morning Gold Fix: June 16, 2010
Courtesy of www.fmxconnect.com
Overnight Summary
- Russia Announced it Intends to Buy Canadian Dollars & Australian Dollars
- Euro Weakened Against Dollar, Down from Yesterday’s Highs
- Gold Bounced Between Unchanged and Higher
August
gold was up 1.3 to $1235.7 per 100 troy ounces as of 8:09 AM EDT, this
morning. The June U.S. dollar index was down .315 to 86.605. July
platinum was down 3.0 to $1575.0 per 50 troy ounces. Silver was down
3.8 cents to 18.540.
Where is Your Correlation Now?
For
us, yesterday was a thing to behold. Everything that was supposed to
happen DID happen for U.S. inflationistas. The Dollar was weaker, Oil
was up, stocks were stronger, Bonds were weaker and Gold was up. It was
basically a “Risk-On” day but Gold did not get the memo.
The
Euro was strong against the dollar yesteday. Back in the old days (3
months ago) this used to mean gold should go up, so no biggie right? “But…but…but…
didn’t we just learn that gold was going up along with the dollar
because of the Greek crisis? And that it would back off when the Euro
regained footing and default risk subsided? We don’t understand, why is
this happenning to us Liz, WAAAH.”
What a New Gold Buyer May Look Like:
Welcome
to the New Gold. It moves as a proxy for itself. A weak dollar, a
strong dollar, it doesn’t matter. It moves because of its own
fundamentals. It is a hedge for inflation like your house but is far
more portable. It earns no interest, but it will if someone can’t make
delivery or a mine strike stops supply. It can be used as working
capital now: Clearing Brokers are now permitted on Comex to count
delivered Gold at cash value in their trading accounts. “As an
enhancement to our Performance Bond Collateral schedule, firms are now
able to post physical gold to CME Clearing to cover non-segregated
(NSEG) Performance Bond requirements. Currently, gold is being posted
to JP Morgan Chase Bank in London, England. In the near future, we hope
to add additional depositories. – CME April 2010.” That would be another word for money folks.
Stop
looking for correlations and just ask yourself, who do you know is
buying gold to sell it? Who do you know, deep pockets or shallow, that
is flipping their investment? The only sellers of Gold are hedge funds
with short term perspectives, and the IMF which is selling it to
Central Banks. The effort to buy gold is a commitment, not a click.
People do not buy it on a whim yet, but the banks are working on that
now. The decision to sell for these grass roots believers will not come
easily in our opinion. And when the public does, some will get smoked
on the exit,just like the last generation of buyers. But that is
another story altogether. For now, until you see Sovereign wealth funds
buy it or it starts acting like a Giffen good, we are personally dip
buyers. Disclaimer: Think for yourself.
-Elizabeth Thawne
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Vote with your money...a vote for gold is a vote against the liars and thieves who gave you Iraq, Afghanistan, 911, the economic situation, and the Gulf of Mexico. Plug the hole with politicians!
FTWBTWFY
"a vote for gold is a vote against the liars and thieves who gave you Iraq, Afghanistan, 911, the economic situation, and the Gulf of Mexico."
Um, sure. Just what offworld system are you buying Gold from that is isolated form the very complex weave of finance and politics we live in? You didn't find Doc Savages secret valley did you?
Does "the complex weave of finance and politics" have the intertwined liabilities that will cause simultaneous implosion/explosion of all in a crisis? Are they blown in the wind because their basis is fraud?
Does physical gold in your hand share any of these liabiliites?
Are we done now?
Was Doc's valley located near Uranus?
The Euro has already been shown as trash since the possibility exists of the Eurozone breaking apart because of the fiscal problems of it's various members.
Anyone who can add 2+2 and come up with 4 understands that the Dollar is toast and can in no way survive in it's current form unscathed. It is now only a matter of time before the Dollar is attacked by the monetary snipers of the CDS world.
There will be a day in the near future where the Dollar gets whacked and Gold breaks upward. THIS will be the "oh shit" moment because at this point common sense will set in and become prevalent.
Even if you are stacked to the gills with Gold assets you WILL be scared as this unfolds!
How do you think you will feel if you have no Gold assets or worse, you have paper Gold and find out it's a scam and you have nothing?
THIS is coming on a global scale!
Investors will be thinking "hey, wait a minute, we were selling Euro's a couple of weeks ago and buying Dollars and Gold, now we are selling Dollars".
The fact that Gold is a currency with no liabilities and thus cannot bankrupt will hit everyone right between the eyes all at once.
The selling of the Dollar will also spill over to the Treasury market where rates will push higher even with Fed purchases. The Fed will have a huge problem on it's hands when they must sop up new supply while foreign demand dries up and outright sales begin. The "green shooters" will not be able to spin two words when interest rates begin to rise. You may hear "rates are going up because the economy is strong", don't believe it!
Gold will become THE currency of choice as huge capital flows try to enter and stake a position in Gold. THIS is where we will see the long predicted commercial signal failure, paper defaults and just who REALLY has the Gold and who doesn't!
For those of you who own mining shares and in particular the "naked short" juniors and exploration plays, moonshots will be a very common occurrence. Proven Gold in the ground will command premiums never dreamed of before and securing capital to build out or expand mines will be as easy as a light switch.
For those of you who remember how tough it was to finance in the late 90's and early 2000's, the opposite will apply. In fact, the most difficult thing will be CHOOSING between competing offers!
The explosion of values in the very late 70's for mining companies and the ridiculous valuations of the Dot com boom of the late 90's will pale in comparison to what is coming! Since 2000, Gold has been THE best performer and so have the real mining concerns but it seems that every time we got moving, our party was pissed on.
THIS will not happen again as we enter what I call the "every man for himself" phase.
We are set up for the massive short positions both in the metal and the shares to blow up unlike anything ever seen. Massive fortunes will be completely lost while massive fortunes will be made by those who started modestly but stuck to their guns.
The mechanics are in place for THE GREATEST TRANSFER OF WEALTH ever seen!
Don't be fooled or "greeded" into trading, now is NOT the time.
Hold tight to what you have and believe in yourself, don't let anyone's influence make you give up even one ounce!
Bill H. @ LeMet
Agree with everything except owning equity in mining firms. The moonshot will happen, but on the way up national governments will seize/nationalize mining companies, and pay off shareholders in worthless FRNs.
I also expect govt to seize 401-Ks and IRAs with promises to "guarantee" a 10% return...in FRNs.
I don't trust anything except physical, food, ammo, and the Katadyn Pocket water filter. I would love, love, love to be proven wrong about all of the above, and have the ammo rot in my safe.
Personally, i have to thank JPM for making it easy for me to put together a nice portfolio of physical. There's no way -- at real non-manipulated prices -- I could have even amassed physical.
So, here's a tip of the hat to Jamie. Of course, I don't really intend to return the favor and help those guys out of the bind they are in vis a vis delivery. Nope.
Just as they crucify the peasants taking every dime they can, well....we little goldbugs....we've learned from the master.
as you said, the vast majority of us buying are not planning on selling for a long, long, long time.
"the vast majority of us buying are not planning on selling"
Its my investment for my family's future. There is only 6 trillion dollars worth of gold above ground on this planet, but 100's of trillions of dollars floating around in the digital world with nothing to back it except words of politicians! 700 trillion dollars worth of derivative contracts, trillions of dollars of debt, trillions of dollars worth of liabilites... What kind of magical thinking has gotten us to this absurd place?
septicshock
"Its my investment for my family's future." Ok then just when do you plan on trading it in for a currency which you can buy food with?
Spend currency-Buy Gold-Sell Gold-Buy currency-Buy food. That is the path correct?
As long as septic shock keeps his day job and is paid in FRNs which he can then purchase food with then WTF is the problem. Any FRNs not used for immediate consumption should be converted in to PMs to maintain their wealth/purchasing power.
In the future there will be parallel currency culture. The proportion of each currency (fiat and gold) you will hold will depend on the time frame that you plan on spending it. All the fiat currency has to do is maintain its purchasing power over he short term.
There's always the possibility of spending gold. It was done in the past you know.
Hi GF,
It might surprise you that during the Weimar inflation that entire blocks of Berlin were purchased for a single ounce of gold.
Cycle goes like this:
(1) Have the distinct privelege to understand the fiat trap.
(2) Be allowed to buy a store of value.
(3) Observe when the right time is to functionalize that store of value. That may very well be (a) at a gain for currency of the day (b) at a loss for currency of the day, it depends on circumstances.
It has been the history of all 3800 fiat currencies that they follow the same path. Have you read the historic accounts? Weimar? Yugoslavia? Mexico? Zimbabwe? France? US?
It seems you are very interested in understanding what is going on. May I suggest Mises.org and Huerta de Soto's book that is on-line and free?
Take care, LB.
hey now thats interesting! do you have a good source for your weimar republic quote?
I have just started history of the 3rd reich, and would love to have a good weimar republic follow up to move into, if you could find the time to post something you could recommend would really appreciate it.
IWT
General overview, Shirer, Rise and Fall of the Third Reich. must read. many many little known, overlooked, but important facts. Excellant lead up. war years, a little weak, but worthwhile.
Excellent thats the one I meant i had just started. Thanks for taking the time. Good to know that a decent prelude is included there.
You sell when the need is there. Timing the transfer of gold to currencies, to suit ones needs, isn't necessarily an issue. In a world of fearful gyrations in the stock market, and not having the sophistry to outwit HFT asset destructobots, it is prudent to place one's savings into a medium that has stood the test of time, particularly in periods of turmoil.
You take your road Gully and good luck with that.
If you need support when it is all hashed out, go seek out a gold bug. They will be holding the wealth of ages. I wouldn't count on too much benevolence if you keep attacking others in your pursuit of self-affirmation though.
So you don't believe in trading one good for another? You can't just buy dollars with dollars and not play with real stuff.
I have thought about this too, and am having a hard time coming up with an alternative to gold or silver.
Here's a scenario, you have money saved for your kid's college, say 100k to make it a round number. If you think the dollar will collapse where to you put it?
There are lots of things people will need, and can be bartered with, but what has the following criteria?
1) will be needed no matter what, tp, razors, gasoline, anti-biotics, dried beans, levi's, guns, ammo, batteries, p.c., booze, hand tools, guitars etc come to mind
2) Is not perishable.
3) does not take up a huge amount of space or is not hazardous.
4) Will not depreciate
Most of the above would take a my entire garage. Some of the items are illiquid, or perhishable. technology depreciates. Some like booze and guns are heavily regulated and taxed.
I would really like to store gasoline, but 100K is currently 30K gallons. Where would I store it?
If you have any ideas please let me know. I would appreciate it. I have asked many friends and we are stumped.
Arable land that you own--not a business that you own. And don't declare a dollar of income from selling crops or IRS will rape you over time.
You obviously didn't read the article, or doing that, you failed to understand it. Gold is being remonetized. Therefore, your comment shows an abject failure to actually comprehend what is contained within articles on this site.
And if actually reading the article is still too much to handle, then wrap your head around this one...
The little general store out here in rural bumfuck now GLADLY accepts silver (mercury dimes & franklin half-dollars)... they even give you wink/wink discount if you pay in silver.
Stick that in your pipe and smoke it. Or burn FRNs... same difference.
Try $1.4 Quadrillion worth of derivatives floating around...
septic,
NWO-Globalism......................need I say more?.
Frustrated at the lack of action in New Orleans? Want to be pro-active in helping in what is coming to the GOM?
Come, we can do something together…
http://aadivaahan.wordpress.com/prare/
If there are any hedge fund managers out there or anyone else for that matter reading this and they are wanting to sell their Gold Bullion Holding. Whether it be one tone or 500+ tone i'm in a position to purchase such bullion.
please contact me on domhk2000@gmail.com
This is serious any anyone doughting my intent then please put me up to the test.
Well, you fail the spelling test first off.
Hope his accounting is not as bad as his spelling, but good luck to him. Good luck finding it in size as well. Gonna need a big-ass gold detector!
+2
yeh but seriously why rib the dude about his spelling? he might be dyslexic, he might be a non native english speaker, or he might have thought he was in an environment where people look through things like spelling errors and to the message rather than the presentation.
Having said that, i have lost my rag for minor things people have written, which i am working on cutting out!
Or it could just be an inept scam attempt.
http://silverstockreport.com/2010/10tonnegoldscam.html
hmm interesting, thanks for posting that.
May I ask what on earth is your avatar? looks like the smile of an english coal miner. urgh.
Insert,
Exactly, he/she may be a Nigerian............
He/She, could call the IMF..............or a few CentralBanks.
Dropped you an email there Black Swan.
Have bulk physical gold for sale in Ecuador.
zak.nick (at) gmail.com
'its own proxy' bitchez.
Buy gold now or be priced out forever! The gains are permanent. Those who buy gold will enjoy 30% annually compounded returns forever; those who don't will live in tent cities.
Trimmed Hedge
"Those who buy gold will enjoy 30% annually compounded returns forever"
Dude, really?
Hey, we have a buyer for when the rates over shoot.
You better read your history, particularly about the Weimar Republic.
Unfortunate fact~
So many of the German jews who saw financial meltdown coming & sought safety in gold as inflation went berzerk, didn't even get to live in tents. If you hoard your gold, better make sure no-one knows you have it. Your wisdom & forward-planning may not necessarily be enough to protect you.
Also, when shit gets real: very important not to be Jewish in 1941 Berlin. And don't be white in 2011 Compton when shit gets real. And when SGR in 2011, don't be non-Hispanic in Los Angeles. Be somewhere where you're just like everybody else. Except you have a shitload of secret gold.
Ha ha, nice riff on the "real estate always goes up" theme!
As soon as everyone else thinks this too, it may be time to lighten up a bit on gold.
I'm chillin with my bling, this is how I roll
http://www.axznt.com/axznt/images/GoldDollarSign.jpg
Screw dem guns, this what guards my stash
http://www.wizards.com/dnd/images/4e/20071008_we_1.jpg
How crass of you Gully. Quite gaudy and of poor taste. New money glitz. Wish I had some!
Stop looking for correlations and just ask yourself, who do you know is buying gold to sell it?
A polite way to say: keep buying, and take delivery.
I don't need no stink'n badges!
I need Gold ya Gringo's!
Home construction and building permits down. Time to smash gold.
Maple Leafs, no silver or copper in 'em, sweet
OT: When the BP execs entered the White House just now, no one held the door open for them.
But you do own silver, too, don't you? Gold is way overvalued compared to silver, or rather, silver is way undervalued compared to gold. So silver will outperform gold by multiples should the markets correct this historic situation.
Welcome to the Gold-Dollar Bifurcation
Joe Sixpack
Gold-Silver.US
Welcome to the Gold-Dollar Bifurcation.
Just in time for the Obama administration.
Competition for the dollar.
This ought to cause the Fed to holler!
Welcome to the Gold-Dollar Bifurcation.
A new trend is in formation.
Shiny beats empty, and the financial systems goin' down.
If you got gold or silver, you're goin to town!
Welcome to the Gold-Dollar Bifurcation.
Derivatives implosion lead to dollar's deprecation.
Markets down, and bonds collapse.
The world's current financial system will lapse and pass.
oro y plata y plomo y agua y comida y antibioticos...y mucha, mucha suerte.
+ mucho. Que TODOS aqui tengan suerte...
When can we start talking about silver?
I'm surprised the anti-gold enthusiasts don't point to silver as a measure of how overvalued gold might be. Maybe because they're afraid it's the other way around, that silver is undervalued? But that would mean we're all focused on the wrong metal.
As I have been reporting the silver market is explosive.
The silver that was called for delivery in March certainly could not be detected as leaving the Comex or being credited to the eligible inventory.
It is a curious coincidence that what left the SLV and the Comex together adds up to the 21 Mozs that was standing for delivery.
I believe there are NO coincidences in the PM markets! As for May it could be that they have not been delivered or cash settlements have been offered or they are just delaying; it is difficult to say.
I do know that people with even small orders are waiting months for deliveries. The US mint has declared a shortage of silver for its operations. Many outlets in Europe are not taking orders due to shortages. The dealer inventory at the Comex has been declining for years now and 53 Mozs is a very low inventory level as is the overall inventory of 118 Mozs. This is not temporary but a trend that goes back a long way.
What should be noted about defaults is that they happen almost without warning. One minute there is still some inventory to meet demand then as the last ounces are taken there is suddenly none available. The smoke that I see coming out of the market is probably about all the warning we will get.Adrian…@ LeMet
thes,
Gold is solely money..........
Silver is money & an Industrial metal............
Silver supplies globally are far under Gold. So, yes, by all means snag all you can.
As this global train to hell progresses, the ratio's will get closer in line.
But, seriously not close to 15-1............
Jim Sinclair was asked about Slvr, in relationship to Gold as a store of wealth, he said he had nothing against it, except you need a semi to haul what you can carry by hand compared to Gold.
Slvr, is a by product of mining other Commodity metals, since the prices of these are down, and going farther down,they are not being mined.That means less Slvr will be brought to mkt.
So I look for it to increase dramatically soon.Also, in case of a REAL SHTF scenario, it will be extremely useful for day to day transactions.
Treasure of the Sierra Madre? You rock, Durden.
Like I said before, I will eventually get my gold from people who need to change it into my silver coin so they can actually buy something modest, like food, ammo, sex, etc. Who's going to give a whore a Gold Maple when the SHTF and you need to de-stress?... You wanna get laid and have a drink, not buy the whole cathouse.
"Gold is the money of Kings and Governments. Silver is the money of men."
PS: I'm expecting about a 20 to 1 trade ratio from all you desperately rich and scared gold bugs heading North.....
hmmm - 20 shillings to a soveriegn, right? Historically accurate then, here in the Colonies anyhow. wot?
http://www.marketoracle.co.uk/Article20327.html
Interesting article,still studing this subject.