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Morning Gold Fixing: Geopolitical Instability In Middle East - Gold Today Like Gold In The 1970s?

Tyler Durden's picture


From GoldCore

Geopolitical Instability in Middle East - Gold Today Like Gold in the 1970s?

Spot gold and silver fell 6% and 9% respectively in January. The January price fall looks very much like another price correction and consolidation and is to be expected after the 30% rise in dollar terms seen in 2010. Absolutely nothing has changed with regard to the fundamentals of the gold and silver market and investors should use this sell off as another opportunity to diversify into the precious metals.

Correction: Yesterday our market update said that gold bar premiums in Hong Kong were at 17-year highs. They are in fact at 7-year highs, their highest level since 2004.

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Gold in USD – 1 Year (Daily)

Gold’s 150 day moving average is at $1,310/oz and as can be seen in the chart above this has provided strong support in recent months. Interestingly, gold fell some 1.5% in January 2010 and continued to fall in February before bottoming after the first week in February (08/02/10). Gold then rose slightly in February, consolidated in March and rose strongly in April, May and June. July saw another correction prior the strong gains seen from August to December.

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Gold in USD and British Sovereigns in USD – 30 Day (Daily) – Sovereign Premiums Rise

Nothing has changed regarding tight supply and robust demand and indeed, the geopolitical events in Tunisia, Yemen and Egypt and tensions in the Middle East provide another important catalyst for higher gold prices in 2011. With all the attention on Egypt, the risk of war between Iran and Israel and possibly the U.S. has been forgotten about – for now.

There is a concern that we could see geopolitical contagion and the crisis spreading to the undemocratic oil rich states of United Arab Emirates, Kuwait and Saudi Arabia. This could lead to an oil crisis and at the very least it will likely lead to higher oil prices and most likely a sustained period of higher oil prices. This will lead to even higher trade deficits and inflation in oil importing countries - especially the U.S. which is one of the most oil dependent countries in the world.

The Middle East remains very unstable with real tensions between Israel and its Arab neighbours and Iran. The IMF's Managing Director, Strauss-Kahn, warned in Singapore overnight that "as tensions within countries increase, we could see rising social and political instability within nations -- even war."

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Gold in USD – 1971-2011 (Weekly)

The two oil shocks of the 1970s saw gold prices rise by more than 24 fold (2,300%) in just 9 years - from $35/oz to $850/oz see chart above).

To put that in perspective, today gold's rise has been far more gradual and it has risen some 5 fold (430%) in 11 years - from $250/oz to $1,330/oz. In this regard it resembles gold’s rise from $35/oz in 1971 to nearly $200/oz in late 1974 – a six fold increase.

Given the significant macroeconomic, systemic, monetary and geopolitical risks of today gold is likely to perform again as it did in the 1970s. A 20 fold increase from trough in 1999 to peak sometime in the coming years would see gold rising to over $5000/oz .

This may seem outlandish to those unaware of gold's fundamentals but the very small supply of gold internationally, increasing demand (particularly from investors and central banks), the sovereign debt crisis in the EU (soon to spread to the U.S.) and the debasement of the dollar, the euro and other currencies internationally makes this increasingly possible.

Those who buy this price dip in gold and silver will likely be rewarded again. As ever rather than trying to predict the future price movement of any asset class investors and savers today need to diversify and protect themselves from the significant macroeconomic, systemic, monetary and geopolitical risk in the world today.


(Wall Street Journal) --Barrick CFO: Central Banks May Shift More Reserves Into Gold
The world's biggest gold producer expects central banks will likely shift more of their monetary reserves into gold this year, as they worry about soaring stockpiles of U.S. dollars. Jamie Sokalsky, chief financial officer of Canada's Barrick Gold Corp., said there has been a "sea change'' in the past year, with central banks that had stocked up on U.S. dollars starting to buy more gold to diversify their holdings. Many forecasters say that trend will continue this year, since global currency reserves are approaching the $10 trillion mark—the bulk of it in U.S. dollars— even as a faltering economy and climbing debt load look set to depress the value of those dollars, said Mr. Sokalsky, in an interview with The Wall Street Journal.

(Bloomberg) -- Rand Refinery to Upgrade Refining to Boost Coins, Bus. Day Says
Rand Refinery Ltd. of South Africa will spend 500 million rand ($70 million) over the next five years to upgrade its gold and silver processes, Business Day reported, citing Managing Director Howard Craig.

The company will work with commercial banks to encourage retail buying of gold coins, the Johannesburg-based newspaper cited Craig as saying. The smelter’s capacity will double to 8,000 metric tons a year and production of refined silver will increase fourfold, it said.

(Bloomberg) -- Gold Gains as Inflation Concern, Egyptian Protests Boost Demand
Spot gold climbed, rebounding from the biggest monthly drop since 2009, on speculation that rising food and oil prices will increase the metal’s appeal as a hedge against inflation. Protests in Egypt also boosted haven demand.

(Bloomberg) -- Commodities Overtake Stocks, Bonds After Two-Day Gain on Egypt
The biggest two-day rally in commodities since December pushed raw materials past stocks, bonds and the dollar for a second month, after Egyptian riots drove oil, wheat and rice higher.

The S&P GSCI Total Return Index of 24 raw materials gained 3.1 percent in January and rose for a fifth month, the longest streak since 2004, according to data compiled by Bloomberg. The MSCI All-Country World Index of equities climbed 1.6 percent including dividends. The U.S. Dollar Index, a gauge of the currency against six counterparts, fell 1.6 percent. The Global Broad Market Index for corporate and government bonds lost 0.2 percent as of Jan. 28, Bank of America Merrill Lynch data show.

Commodities have beaten stocks for three months, the longest stretch since June 2008, after the Federal Reserve pledged to buy $600 billion of Treasuries and demand for clothes and food lifted cotton, cocoa and copper. Equities were poised to break the streak until Jan. 28, when concern Egyptian President Hosni Mubarak will be ousted sent the MSCI gauge to its biggest retreat since November and boosted food and fuel.

(Bloomberg) -- Gold’s Biggest Gain in 12 Weeks Is ‘Capitulation’ End (Update1)
The “capitulation” in gold that drove the metal to its worst January in 14 years may be ending as escalating violence in northern Africa spurs demand for a haven and after a key technical indicator held.

Futures traded on the Comex exchange in New York jumped 1.7 percent on Jan. 28, the most since Nov. 4, as thousands of people took to the streets of Egyptian cities to protest the 30- year rule of President Hosni Mubarak. Gold earlier rebounded off its 150-day moving average, an indication the metal may surge 21 percent to a record by the end of June, according to technical analysis by the Hightower Report.

(Bloomberg) -- Mexico Gold Output Rose in November, Silver Declined (Update1)
Gold production in Mexico rose 3.3 percent in November to 5,264 kilograms from 5,095 kilograms in the year-ago period, the National Statistics Agency, known as Inegi, said today in a statement on its website.

Silver production declined 3.3 percent to 256,767 kilograms compared with 265,536 kilograms in 2009, Inegi said.

Copper production rose 4.6 percent to 19,291 tons in November compared with 18,449 tons in the same month a year ago, the national statistics agency said.

Overall, mining production in November rose 1.1 percent, Inegi said.

(Reuters) -- Policymakers see dollar losing reserve currency allure
The U.S. dollar's role as a reserve currency will diminish in the coming years as Asian economies like China grow and countries seek to diversify their monetary holdings, policymakers said on Friday.

The U.S. Federal Reserve's policy of quantitative easing -- essentially printing money -- and a call by France to look at ways to wean the world off the dollar as the sole reserve money have put the U.S. currency in the spotlight.



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Tue, 02/01/2011 - 09:49 | 923369 gold mining ceo...
gold mining ceos are idiots's picture

Somebody tell the gold mining stocks that gold is 1300. Newmont is trading just above its 2003 high. 

You bet there is a deliberate attempt to kill these stocks.

Tue, 02/01/2011 - 09:57 | 923384 Hephasteus
Hephasteus's picture

Well seriously. Gold and silver is nanoseconds in geographic time from standing up and kicking the banks right smack in the nuts. Of course they are trying to beat it down with everything they have.



Tue, 02/01/2011 - 10:49 | 923564 unwashedmass
unwashedmass's picture


i wouldn't get all excited about this. Jamie has complete air cover and taxpayer cash to make sure that gold goes nowhere.

the hysterical part of this is the ONLY sector in the market place trading with a faint hint of normalcy is the gold/silver sector.

Tue, 02/01/2011 - 11:05 | 923618 Hephasteus
Hephasteus's picture

Ya. I mean if i were the gold and silver market right now. I'd be really really trying to act like normal, like i'm all cool and shit. You know what I mean.

Adj. 1. hysterical - characterized by or arising from psychoneurotic hysteria; "during hysterical conditions various functions of the human body are disordered"- Morris Fishbein; "hysterical amnesia"
Tue, 02/01/2011 - 12:23 | 923895 DosZap
DosZap's picture


The hysterical part, is that Jamie does not have the cover of the taxpayer.

We will get screwed in the end, middle, now, previously.

But the shit their calling money is not money, and the taxpayers will never pay one more cent toward their insanity.

Game Over..................we have a copy of the test.

Tue, 02/01/2011 - 16:43 | 924993 Math Man
Math Man's picture

Would you invest in an industry where companies are removing their hedges *after* a 400% increase in price?

There is good reason for metals and mining stocks to underperform.

Tue, 02/01/2011 - 09:57 | 923382 bullionbaron
bullionbaron's picture

Gold and Silver are still buys at these levels, but will likely head into a bubble much like they did in the 80s. In my opinion we are entering the 3rd phase of the bull market:

Will instability in the middle east add to the price of the metals? It seems likely.

Tue, 02/01/2011 - 10:24 | 923466 ColonelCooper
ColonelCooper's picture

PLausible scenario??  - Gold will head into a bubble, then correct.  Prices will enter the stratosphere, blow up and land somewhere around.... lets say $3000 just for fun. 

Meanwhile all the longs who were in at the 7-1200 range will be ridiculed by trolls for having bought into a bubble............... 

Tue, 02/01/2011 - 12:37 | 923965 JW n FL
JW n FL's picture

Got Guns? Check.

Got Ammo? Check, Check and Check.

Got Food? Check.

Got Medicine? Check.

Got a Water Source? Check.

Got a Power Source? Check...


Well then spend that paper on whatever you want other than leaving it in Paper Form to be printed away by the Ben.


Just buying something is better than it sitting in the Bank while Ben adds 30% more money to the supply (thru printing) thusly de-valuing the monies in your Bank account by however much he Prints, 30%? YTD?

Tue, 02/01/2011 - 13:05 | 924068 ColonelCooper
ColonelCooper's picture


My point was that in the comparison to the 1970's the trolls only seem to ever be able to point to the people who bought at the top, right before the blowoff.  Those who bought at 200, and were sitting on a nice stack at 600 when the dust settled were spittin' feathers IMO.

Tue, 02/01/2011 - 13:11 | 924097 ColonelCooper
ColonelCooper's picture

Good list, BTW.   I'm checked off to redundancy.  Weren't you figuring on riding this shit out in a boat, or on an island or something?   Still working on it?

Tue, 02/01/2011 - 13:49 | 924262 JonNadler
JonNadler's picture

but JW, you can't eat food!!.....oh sorry, it's just the force of habit

Tue, 02/01/2011 - 13:50 | 924249 DosZap
DosZap's picture


Tue, 02/01/2011 - 13:49 | 924261 DosZap
DosZap's picture

No, we are not entering Phase 3.We are in Phase 2.

95% of Americans never have given ONE seconds thought to Gold or Silver.

When everywhere you go, people are talking it up, then we will be in 3.

All the dudes in ETF's are traders, and not investors.

Tue, 02/01/2011 - 14:24 | 924401 Math Man
Math Man's picture

Stages, shmages. 

Those hot money hedge funds and traders in the ETFs could crush gold at any minute.

They've bought some much damn gold it's not even funny.

ETF holdings are almost as large as annual mine production.

If they puke, so will the Gold price.

Tue, 02/01/2011 - 17:01 | 925077 Math Man
Math Man's picture

ETFs already showing signs of indigestion.

Puking could start sooner than we think.

Tue, 02/01/2011 - 16:10 | 924844 bullionbaron
bullionbaron's picture

Hey DosZap, in my opinion we are in the transition now. I am not suggesting we are right at the peak, I'm saying we're sitting at the start of 1978 and about to head parabolic...

Chances are even at the peak of the bubble only a small percentage of the entire population will be involved. Did you read the link I posted? I discussed the possibility that the actual rush to Gold may occur elsewhere due to the poor savings rate that western societies have now compared to the last bull market.


Tue, 02/01/2011 - 10:01 | 923388 Quintus
Quintus's picture

Oil shock?  The only thing that shocking about Oil is that despite all the geopolitical uncertainty and the rapidly falling dollar, the price of WTI is going down today.

It's almost as if (perish the thought!) somebody was intervening to keep the price far lower than, say, Brent Crude, and continuing to fall despite all the drivers for higher prices being in place.  Is that the heavy hand of The Bernanke I sense?  

Tue, 02/01/2011 - 11:38 | 923728 michigan independant
michigan independant's picture

Black Gold

 one of the 10 largest refineries in the world and has the capacity to refine more than 525,000 barrels of crude oil per day.

Meanwhile, The raw materials price index jumped from 43 to 62, reaching its highest level since mid-2008. The share of manufacturers who saw an increase in input costs surged to 64 percent, compared with only 2 percent who saw a decrease. Finished goods prices rose for the third month in a row, although the great majority of respondents continued to note no change. Sixty percent of respondents anticipate further increases in raw materials prices over the next six months, while 40 percent expect higher finished goods prices."

Egypt must listen to the future since Uncle Hugo cannot compete anyway. I like gold but in the long run one ounce is a very good suit...

Tue, 02/01/2011 - 12:06 | 923846 Temporalist
Temporalist's picture

So when a suit costs $3000 because of the rising price of materials, wages, transportation you will be okay with that.  I guess $5000 suits will be okay too.

Tue, 02/01/2011 - 16:18 | 924892 RafterManFMJ
RafterManFMJ's picture

Who wear suits in a FEMA camp?

Tue, 02/01/2011 - 13:03 | 924058 Hugh_Jorgan
Hugh_Jorgan's picture

In the long run maybe, but who cares. In the really long run we could be back on a gold standard and the price of your gold will not be inflated anymore. Between now and then, a few ounces could pay off your mortgage.

Tue, 02/01/2011 - 13:51 | 924211 DosZap
DosZap's picture

I like gold but in the long run one ounce is a very good suit...

Yep, but you cant eat suits, and no jobs, no suits.

One ounce of Gold may be enough to feed your family for 6 mos.


Tue, 02/01/2011 - 12:32 | 923942 DosZap
DosZap's picture


Wait till the ENTIRE ME gets tunrned into radical Islamic states.

The ones protesting now have a right, and reason.

But they haven't seen shit till they get rulers like Iran.

They will be WISHING for Mubarack.

PS: SO will we, because the price of crude, will go so high, we will be forced to go to a global war.

China once again has shown its longrange thinking and planning has trumped the entire world.By Stockpiling billions of barrels, at cheap prices, and every other comodity needed to sustain their peoples livlihoods(i.e.) not starving.

Tue, 02/01/2011 - 10:00 | 923392 luk427
luk427's picture

They just gave us a buying oppurtunity.

Tue, 02/01/2011 - 10:17 | 923440 lunaticfringe
lunaticfringe's picture

Dude, I'm buying anything ur selling.

Tue, 02/01/2011 - 10:01 | 923399 ageofreason
ageofreason's picture

A fool and his gold has just parted.....

Tue, 02/01/2011 - 10:01 | 923400 williambanzai7
williambanzai7's picture

Tue, 02/01/2011 - 10:19 | 923447 lunaticfringe
lunaticfringe's picture

So stupid, I laughed out loud.

Tue, 02/01/2011 - 11:13 | 923653 Crispy
Crispy's picture

Pure genius!

Tue, 02/01/2011 - 10:04 | 923405 topcallingtroll
topcallingtroll's picture

Afraid the intermediate top is in for now. Record outflows in january from the gld etf. I love gold by the way, but I'm calling a top here. Nothing looks good right now. Maybe the stock market has further to run. I cant find much of anything to get enthusiastic about. I am still long and lonely cuz I am not enthusiastic about cash, maybe POT? Fertilizers? Farm equipment makers? BIDU? Just kidding on that last one.

Tue, 02/01/2011 - 10:07 | 923411 Quintus
Quintus's picture

Ah yes.  The old 'Record outflows from GLD' misunderstanding.  Have a read of FOFOA for a detailed explanation of how GLD actually works, and what these outflows mean. 

Tue, 02/01/2011 - 10:11 | 923426 VFR
VFR's picture

was about to say the same. Very interesting

Tue, 02/01/2011 - 10:24 | 923464 william the bastard
william the bastard's picture

"Page not found".

Even if GLD were a scam (which it is not), investors selling GLD are also selling gold.

Tue, 02/01/2011 - 10:26 | 923471 EscapeKey
EscapeKey's picture

Shouldn't you be doing something more enlightened, like posting copypasta telling us PMs are poor investments?

Tue, 02/01/2011 - 10:29 | 923483 Quintus
Quintus's picture

Must be some hidden characters in the address I pasted in.


Tue, 02/01/2011 - 12:08 | 923852 Temporalist
Temporalist's picture

There was a space at the end...

Tue, 02/01/2011 - 10:43 | 923539 ColonelCooper
ColonelCooper's picture

You really need to do some homework.  The good trolls at least understand the paper/physical relationship and make the argument that it is irrelevant as "price is price", the paper will drag down the physical, etc...

Your last comment was almost as ignorant as claiming gold was a bad investment because it has outpaced inflation 9 to 1.

Maybe you should stick to pasting Birther comments. 

Tue, 02/01/2011 - 10:44 | 923545 h3m1ngw4y
h3m1ngw4y's picture

investors redeeming GLD is different to investors selling GLD. The first drains gold liquidity from the market

Tue, 02/01/2011 - 10:59 | 923596 Silversinner
Silversinner's picture

one men sale is an other men buy.

only important thing is gold is moving

from the weak hands to the strong hands.

Chinese and Russian CB I consider strong

hands.They just want the physical stuff,

Chinese like to play the paper hedging

game,but make no mistake;they just

use this game to aquire as mutch gold

as they can,before the shithouse burns down.


Tue, 02/01/2011 - 11:35 | 923720 VFR
VFR's picture

the point is they are not selling they are taking delivery. And even if they were selling who are they sellig to as gold is gold. It doesn't go away therefore bizarrely investors can't be selling gold as in reducing interest as there is a buyer. The selling corrosponds with net outflows of gold bullion. The papermarket is kaput. 

A better link. At present rate in 18 months GLD will have no phyisical gold.

Tue, 02/01/2011 - 10:10 | 923421 topcallingtroll
topcallingtroll's picture

Holy shit bidu is up 8 percent. Maybe that is the place to be.

Tue, 02/01/2011 - 10:18 | 923445 luk427
luk427's picture

There is a record outflow because people are learning etf's are a scam. If SHTF you will be standing in line with your peice of paper like a fool.Why do you think the director does not own a single share.

Tue, 02/01/2011 - 12:11 | 923864 Temporalist
Temporalist's picture

That "story" has been debunked.  The director and management do own the ETF.

Tue, 02/01/2011 - 10:58 | 923593 Henry Chinaski
Henry Chinaski's picture

Topcalling troll:  Good point.  Having trouble deciding on what to do with some extra cash.  Already diversified in stocks, PMs, RE, and are prepped, locked and loaded etc...  Nothing looks so great right now as an investment and cash seems like a liability.  Finally I concluded on a good used roller-skate (economy car) in case gas prices take off. 

Tue, 02/01/2011 - 12:37 | 923967 eddiebe
eddiebe's picture

Troll, surely you have considered the fact that by holding dollars you are betting on that lame horse? Maybe top calling isnt such a great strategy.

Tue, 02/01/2011 - 10:06 | 923408 jus_lite_reading
jus_lite_reading's picture

Middle East tensions are bullish for the global economy. The Bernank said we will see more revolutions, riots, and chaos around the world because this is the result of strong economic recoveries.

Every recovery from a recession has seen 9% real inflation in the US, 20% real unemployment coupled with record PM prices. The Bernank knew this. He is god. A Jewish god. A god for the Jews. The Bernank is the messiah the Jews have been waitin for for the past 2000 years. He has arrived.

Tue, 02/01/2011 - 10:14 | 923431 topcallingtroll
topcallingtroll's picture

Go long Jews? How do I do that?

Tue, 02/01/2011 - 10:39 | 923523 snowball777
snowball777's picture

Try the foreskins ETF.

Tue, 02/01/2011 - 10:09 | 923414 Oh regional Indian
Oh regional Indian's picture

Gold is definitely the one to watch.

Because Silver will be doing crazy things on the side. Still see Gold Vs. Silver commentary art a 10:1 ratio, even here on the hedge.

This tells me that Silver is a far better buying opportunity than gold, though for the near-mid term, both will gain, appreciably.

Still, not the response one would expect to so much crisis.

The beach ball is swelling and being held down harder.

And meanwhile, foodstocks are shrinking and grainbaskets are flooded or frozen.

Hard asset investing is the easy choice.

Buy Silver. Even at the expense of gold.


Tue, 02/01/2011 - 12:11 | 923865 Mark McGoldrick
Mark McGoldrick's picture

Gold/silver at a 10:1 ratio?

What's stopping you at 10:1?  If you're in full retard mode, why not just say 5:1 or 1:1?

For your information, the gold/silver ratio for the past 20 years has been about 60:1.  All the silver worshippers who claim a 16:1 ratio are extracting data from a 5,000 year timeline, which is ludicrous and only serves to sell hyperbole and propaganda. If you think the price dynamics of silver from 3000BC are relevant today, you are thoroughly drenched in Kool-Aid.      

Tue, 02/01/2011 - 12:55 | 924037 Flakmeister
Flakmeister's picture

  16:1 is ratio in the earth's crust...but before jumping on that, you have to take into account the average ratios in ores being produced. As a rule of thumb, Ag is primarily found with Pb and Zn, Au with Cu. Of course, there are comingled ores. From the data

World Ag production is ~20,000 tonnes pa

World Au production is ~2200 tonnes pa

Assuming equal utility, which in the limit where both are considered money is the case, this suggests a 9:1 ratio.

Above ground stocks, suggest an even tighter ratio.

By any measure, Ag is cheap compared to Au. Whether this is tradable, fuck knows.



Tue, 02/01/2011 - 14:33 | 924421 Math Man
Math Man's picture

Males and Females are at 50/50 ratio in nature.

Throughout history, people have payed a lot more to bang women than men.

Supply AND demand matter.

Tue, 02/01/2011 - 14:44 | 924482 Mark McGoldrick
Mark McGoldrick's picture

Men fake relationships to have orgasms.

Women fake orgasms to get into relationships.


Tue, 02/01/2011 - 13:07 | 924076 DosZap
DosZap's picture

Mark read the founders valuation of Silver to Gold, not quite 3000yrs ago,m mush less 5000.

It only changed when we went of sound fiscal policy, and a gold std.

Being on a gold /silver std, was like having a wild stallion on a rope.

He could only go as far as the rope allowed. Remove the rope, and he could run as far as he wished(Inflation).

Tue, 02/01/2011 - 10:10 | 923424 RobotTrader
RobotTrader's picture

Gold is dead as a currency.

There will be no return to the gold standard.

The currency to be used will be determined by the government, nobody else.

Rasputin explains it here:

Forget it, Rip. It's "Game Over".
Rasputin - Mon, Jan 31, 2011 - 08:26 PM

One of the most difficult, heart-breaking, gut-wrenching admissions that
a hard-headed Rasputin had to make was to finally agree with his
Poly-Sci major Boomer buddy "Ron", who offered this pearl of wisdom to
the Mad Monk nearly a decade ago:

"Ras, money is whatever the government tells you it is. Period."

At the time, a much more idealistic, Walter Mittyish Ras argued
vehemently against "Ron's" assertion, countering with all sorts of:

"This can't go on!!!"


"Any minute now I swear!!!"

...retorts in a vain attempt to convince "Ron" that, indeed, the
U.S. was going to return to a gold standard (as well as repudiate the
fraudulent fractional reserve lending/central
banking/securitization/derivatives scheme).

In fact, it was during the ensuing five or so years that an on-fire
Rasputin started cranking out voluminous reports, Powerpoint
Presentations, and five-thousand missives on chatrooms, screeching the
scroomer case and, again, swearing that at any minute, the whole Ponzi
scheme was gonna blow and THEN we would see Rasputin's wistful "Monetary
Nirvana" implemented.

Well, lo-and-behold, sure enough, between 2008 and 2009 Rasputin's long-predicted "Great Disintegration" actually happened.

In spades.

And Ras carefully documented BOTH the economic/financial collapse
AND the massive, gargantuan, unprecedented response by the collective
Uncle Thugs and central banks (and their Pigmem) to that collapse,
watching in abject horror as the Thugs in Charge (and the central banks
and Pigmen) CONSOLIDATED their power, not lose it.

(Ras Conclusion): It was after the "Final Solution" of
March, 2009 (when the Fed went "all in" on monetization and Uncle Thug
stepped in and bailed out BofA, Citi, Chrysler, GM, AIG and the
previously-propped-up Wall Street failed financial gamblers) that Ras
finally, reluctantly started to admit that "Ron" had been right all

And, sure enough, here we are today:

1. Same Thugs in Charge, in charge.

2. Same fraudulent Ponzi Scheme in place.

3. Same Pigmen profiting.

4. Same sheeple blissfully ignorant--and getting ready for the SuperBowl.

So, with all of the above clearly documented by Ras, why should he
NOW believe that any alternative, sound, monetary system will ever be
put in place?

Answer: he shouldn't.

Tue, 02/01/2011 - 10:20 | 923453 Quintus
Quintus's picture

So, if I understand this genius correctly, his argument is 'It hasn't happened yet, therefore it will never happen'.  That's some pretty deep thinking there. 

I could go further and point out that currency collapse is a fairly routine occurrence throughout history, and I don't think there's ever been such a collapse where Gold and Silver holders did not emerge very much better off than paper bugs.  Of course I am forgetting...the US is different....It could never happen here...yada, yada, yada.

Tue, 02/01/2011 - 10:30 | 923489 william the bastard
william the bastard's picture

In January 1980 gold hit a record 850 US dollars an ounce. After reaching those dizzy heights it then plummeted down and remained steady in the 300-400 dollar range for some 20 years- some 50-75% under it's peak.

Tue, 02/01/2011 - 10:33 | 923495 Quintus
Quintus's picture

Yeah - I guess we'd better watch out for Ben to raise interest rates into the teens to stomp on gold again.  I mean there's nothing stopping him, right?

Tue, 02/01/2011 - 10:54 | 923579 william the bastard
william the bastard's picture

Buy-and-hold investors may not have done so well. One dollar put into a U.S. checking account in 1983 would be worth at least $1.92 today, based on annual average interest rates from The Federal Reserve target rate from 1980 to 1982 was 8.5% to 20%. Banks were paying 5% on the accounts in January 1981, according to a report in the New York Times

Tue, 02/01/2011 - 11:13 | 923656 ColonelCooper
ColonelCooper's picture

You are REALLY bad at this.  Take the 1979 chart.  I took a point mid year, (July 1) because I didn't want to cherrypick the low like trolls always do.  The price was $280.  Assuming you held tight through the blowoff, 1 year later, the price was $660.  That was a 135% increase.  One year later, $430 (53%).  One year later, the low of the five relevant years I sampled the price was 310.  This is still a 10.7% gain, greatly outpacing the savings account you tout.  Next year, 1983, 420 (53%). 

You are a tool.  0 for 187.   1979   1980   1981   1982   1983

Tue, 02/01/2011 - 12:47 | 924000 I Am The Unknow...
I Am The Unknown Comic's picture

shhh Colonel!!!  Don't teach him!  The longer he remains a fucktard, the longer people will continue to dismiss him, and the sooner he will lose his paying job as a troll.  Hopefully his replacement will be just as stoopid if not stoopider! 

Tue, 02/01/2011 - 10:47 | 923552 ColonelCooper
ColonelCooper's picture

And how many longs took astronomical profits to sell to those latecomers?  How many longs who bought in long before the peak lost money? 

 You are like 0 for 123 now.

Tue, 02/01/2011 - 11:00 | 923600 traderjoe
traderjoe's picture

And where's the NASDAQ compared to its peak 10 years ago?

Tue, 02/01/2011 - 11:17 | 923669 watchingdogma
watchingdogma's picture

So gold hits 850 for an hour - and everyone in the world who has gold is a loser for the next 20 years?  OK - I guess you could spin it that way - or you could spin it like this -

1975 - avg gold price - $161

1976 - avg gold price - $124

1977 - avg gold price - $147

1978 - avg gold price - $178

1979 - avg gold price - $306

1980 - avg gold price - $612

1981 - avg gold price - $451

1982 - avg gold price - $375


So - unless you got caught up in the frenzy, you weren't hurt at all....

Here's my favorite for you gold/silver bashers - if you were to buy at the beginning of the year - and hold until right now, aside from the current year (2011) - when was the last year that the DOW was a better buy (and hold) than silver?  Answer - 1989

Tue, 02/01/2011 - 12:29 | 923928 Temporalist
Temporalist's picture

Something else to point out - gold cannot be replaced by better performing alternatives to inflate results as happens in the equities indexes. 

Tue, 02/01/2011 - 10:33 | 923496 tmosley
tmosley's picture

Yeah, because nothing ever changes rapidly in the face of economic collapse.

A colleague of mine was planning to go to sunny, stable Egypt this summer for vacation.  That turned out well, didn't it?


Tue, 02/01/2011 - 10:42 | 923537 snowball777
snowball777's picture

A German friend told me his sister is in Egpyt working as a nurse and that the teargas they dropped was so thick the other day her eyes were watering at their hotel...the Aswan Oberon in the middle of the Nile.

Tue, 02/01/2011 - 12:30 | 923936 Temporalist
Temporalist's picture

Go long "Made In The USA" crowd helps the GDP.

Tue, 02/01/2011 - 10:42 | 923536 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Worthless post Robo.  Go read the definition of monie one more time and decide what is a better preserver of wealth; paper fiat IOUs, or gold.

Tue, 02/01/2011 - 10:52 | 923577 h3m1ngw4y
h3m1ngw4y's picture

no gold standard, i agree but an "independent" wealth reserve, nothing fits the bill better

Tue, 02/01/2011 - 11:28 | 923699 Dr. Gonzo
Dr. Gonzo's picture

You are right and wrong Robo. CURRENCY, not money is whatever the govenment says it is. What's written on the USD is proves you right in this regard. Governments don't last forever though. Some don't even last a generation. Gold is existential and people's perceptions of it vary in time but in the end gold will always be emperor of the monetary universe.

Tue, 02/01/2011 - 11:49 | 923784 Sean7k
Sean7k's picture

Robo gets junked a lot. IMHO it is unwarranted here. We are all making a bet. Some of us are betting that the currency will fail and are using gold to protect ourselves. As in Robo's example, we see all the same things Ras is seeing and are planning accordingly, but we are failing to take into consideration a recent phenomenon: currency debasement on a global scale and worked in coordination by the CB's.

This changes the equation dramatically. It creates an opportunity to extend and pretend on a whole new scale. There is no disciplinary action to contain the printing of money.

It doesn't mean it won't happen, but it suggests that it may require a much larger event and reset and even then, the event would be subject to the manipulation of the bankers in charge.

Junking Robo will not change this point, just as these actions will not change the ability of gold to act as a safe store of wealth. However, if you are trying to make money in the markets- you may want to change your formula and consider trading on the predictable actions of the bankers as they manipulate currency and drive tax and spending authority.

This is Robo's point.

Tue, 02/01/2011 - 12:19 | 923892 IBelieveInMagic
IBelieveInMagic's picture

Well put -- yes unprecedented coordination between CBs this time around -- need to see if this will last...

Tue, 02/01/2011 - 12:21 | 923896 Dr. Gonzo
Dr. Gonzo's picture

I never junk Robot Trader but he tries to get junked and probably enjoys it. He likes pushing people's buttons and trying to get them to entertain different perspectives. I always read his posts because he is smart and informed. I would not be surprised if Robot Trader had a gold and silver physical hoard greater than the readers who are junking him. 

Tue, 02/01/2011 - 12:33 | 923941 Hook Line and S...
Hook Line and Sphincter's picture

Ras's need for immediate justice got in the way of him keeping a clear head. Yet, even after arriving at his conclusion, subscribes to another assumed and logically flawed outcome.

Tue, 02/01/2011 - 12:45 | 924008 eddiebe
eddiebe's picture

Robot, you say:The currency to be used will be determined by the government, nobody else That statement is true, but narrow. We need to take into the consideration that there are more governments than one. Until there is one world government, your theory cannot be correct. Think about it!

Tue, 02/01/2011 - 13:27 | 924156 Sean7k
Sean7k's picture

Almost every nation on Earth has a central bank. Just because one world government has not been formalized, does not mean it doesn't exist. We're just waiting for the announcement...

Tue, 02/01/2011 - 15:13 | 924607 Cathartes Aura
Cathartes Aura's picture


the banker class has been creating/destroying nationstates for centuries now, this great game of consolidating absolute control of a hierarchy they've created & focused on for so many generations, systems within systems, funding wars, redrawing boundaries, always inching forward over time. . .

Tue, 02/01/2011 - 10:12 | 923428 dick cheneys ghost
dick cheneys ghost's picture

IMF chief warns of devastating inflation and possible wars. should be good for gold.

Tue, 02/01/2011 - 10:18 | 923438 william the bastard
william the bastard's picture

Remain bearish on Gold and believe that the recent bounce was firstly due to gold being extremely oversold in the extreme short-term and secondly due to the turmoil in Egypt. As with the issue in Korea we believe these tensions will dissipate and Gold will continue to move lower in the coming days and weeks. Technically Gold still looks bearish and as long as $1,350/55 limits any strength we should continue to move lower. Support sits at $1,320. Triple digits afterward.

Tue, 02/01/2011 - 10:34 | 923505 tmosley
tmosley's picture

Bet your life savings on it, genius.

Tue, 02/01/2011 - 10:48 | 923559 ColonelCooper
ColonelCooper's picture

The more talented trolls can remember which shit they pasted the day before, and try to dig up some new material.

0 for 124.

Tue, 02/01/2011 - 13:38 | 924197 Bay of Pigs
Bay of Pigs's picture

Billy/GoldMiddleFinger taking it in the ass again. Who are you quoting here?

Tue, 02/01/2011 - 10:17 | 923439 MiningJunkie
MiningJunkie's picture

Since the dawn of equities, gold shares LEAD gold bullion. If Barrick and Newmont are now in downtrends, so is bullion.

Gold deals are now like assholes - everyone has one.

We need more WSJ and CNBC Specials on "The Death of Gold" in order to set up the next advance - just like I had back in 2001.

Tue, 02/01/2011 - 12:35 | 923953 Temporalist
Temporalist's picture

If you haven't been paying attention nearly all the financial "news" outlets have had gold bashing "reports" over the past few months of gold's historic rise.  They say gold is blood money, gold is topping, hedge funds are out of it...anything to keep the lipstick on the paper pig.

Tue, 02/01/2011 - 12:55 | 924039 eddiebe
eddiebe's picture

Mining J. you say:',Since the dawn of equities, gold shares LEAD gold bullion'

Maybe you think markets are not managed? Good one!

Tue, 02/01/2011 - 10:20 | 923451 Josh Randall
Josh Randall's picture

Still stackin' Silver over here in my 70's Jim Rockford Sportscoat, $200 a day plus expenses..

Tue, 02/01/2011 - 10:23 | 923461 monopoly
monopoly's picture

Gold a bubble. Not even close.  This is one of the most mild corrections in gold that I have witnessed in all the years I have been investing in gold. Most Americans do not even have a clue how to buy gold and even more have 0 invested in gold and silver in any form outside of a wedding ring.

Close to the top. Not even remotely near a top. When the Bernank is indicted, Geithner is fired and Obama resigns, then I sell my gold.

Tue, 02/01/2011 - 10:26 | 923470 william the bastard
william the bastard's picture

9 standard deviations above CPI trend is NOT A BUBBLE!

Tue, 02/01/2011 - 10:55 | 923585 Sam Clemons
Sam Clemons's picture

If you believe the official CPI trend, I've got some ocean front property in Arizona.


On this article, this is old news, and why I've been saying $5000 for years.  $5000/oz gold also provides much needed backing of the US monetary supply.  Ever think that the central banks, who control most of the gold, want gold higher?  Hmmm.

Tue, 02/01/2011 - 10:57 | 923591 william the bastard
william the bastard's picture

"People have this knee-jerk reaction and say that you want gold as a hedge against inflation," said Maxwell Bublitz, who helps oversee $3.5 billion as the chief strategist at San Francisco-based SCM Advisors and recommends investors hold no more than 5% of their assets in the metal. "But the history of gold in regard to inflation shows that it's not a great hedge."

Tue, 02/01/2011 - 11:06 | 923624 Sam Clemons
Sam Clemons's picture

Ok, so if it isn't a hedge against inflation.  Is it a hedge against Pyramid scheme monetary systems which require more and more capital (debt) to keep going? 

Is it a hedge against a bad monetary decisions by world governments and their central banks?

Tue, 02/01/2011 - 11:35 | 923721 Roger Knights
Roger Knights's picture

It's a hedge against hyper-inflation. How can that possibly be avoided in the long term, except by stupendous (and impossible) economic growth?

Tue, 02/01/2011 - 10:35 | 923511 pgarner
pgarner's picture

+10. Lots of nonsense comments before yours.

Tue, 02/01/2011 - 10:25 | 923468 apberusdisvet
apberusdisvet's picture

It may not be this year or next, but in the near future it will be the Asians that will have the ultimate say in currency issues, unless, of course they are allowed to join the banking cartel as a full partner.  Should that happen, we are all screwed as there would be no legitimate power left to curb the total theft of whatever wealth remains.

Tue, 02/01/2011 - 11:04 | 923609 DonnieD
DonnieD's picture

What would happen if China depegged from the dollar and instituted a gold/PM standard?

Tue, 02/01/2011 - 12:59 | 924047 eddiebe
eddiebe's picture

Let's not forget the strongest military power in the world. I'm sure the players of the big game are not!

Tue, 02/01/2011 - 10:26 | 923472 monopoly
monopoly's picture

robot, you are so out of touch. Not even worth replying too.

Tue, 02/01/2011 - 10:35 | 923510 Treason Season
Treason Season's picture

Rowbutt, stick to the anemic tits and ass and spare us the Poly Sci 101 lectures.

Tue, 02/01/2011 - 10:37 | 923515 pgarner
pgarner's picture


Tue, 02/01/2011 - 13:00 | 924051 eddiebe
eddiebe's picture

Treason, love your wit!

Tue, 02/01/2011 - 10:37 | 923514 whopper
whopper's picture

Benron must be throwing the kitchen sink at the PM's, As I watch 2 million pissed off. crazy Egyptians getting ready to turn the middle east upside down and gold is up 3 bucks......yea, right.

Tue, 02/01/2011 - 10:40 | 923524 spartan117
spartan117's picture

Where is Grand Stupid Cycle and his proclamations that the Dollar is in a bull market?  See you at 76 before any meaninful bounce.

Tue, 02/01/2011 - 11:31 | 923712 RockyRacoon
RockyRacoon's picture

Not time yet for him to post.  He predicts trends after they occur.

Tue, 02/01/2011 - 10:40 | 923529 Treason Season
Treason Season's picture

Rick Ackerman, aside from his lunatic doszapian pro-Israeli screeds, is someone to listen to marketwise.


Technicals aside, one reason we believe the renewed uptrend in gold will have staying power is that it has been decades since perceptions of a global crisis have significantly affected bullion quotes, as appears to have occurred on Friday.  We can’t even recall the last time this happened, but it surely hasn’t been for lack of a good crisis.  If investors are indeed becoming more skittish about the actual risks of a world that, already tilting off its in financial axis, has begun to destabilize politically as well, then gold’s ascent from historic lows recorded more than a decade ago has barely begun.

Fri, 04/08/2011 - 02:38 | 1148906 rickack
rickack's picture

You wouldn't happen to have a link to one of those pro-Israel screeds, would you Treason?  I was looking to carpet-bomb Bob Moriarty with a few of them but discovered I had none on file.

And speaking of Gold, here's what I've said for Friday, April 8.  Keep an eye on my precise numbers, because they are my specialty:

GCM11 – June Gold (Last:1466.50)

by Rick Ackerman on April 8, 2011 6:00 am GMT[edit]

The 1466.30 pivot flagged here yesterday nailed the intraday high within two ticks.  Now, although we remain focused on a 1473.10 Hidden Pivot that has served as a minimum upside objective for a while, we are by no means obsessed with it.  Since a thrust to that number is not likely to be the last to achieve a new record high, let’s move to the front burner a 1502.70 target from a pattern of larger degree. Expect it to be reached relatively quickly — i.e., within 4-6 days — if bulls make short work of 1473.10.  Two other, very obscure Hidden Pivots that could cause a stall lie respectively at 1469.70 and 1485.60.  It would be a bullish sign if these resistance points don’t put up a discernible fight.



Tue, 02/01/2011 - 10:43 | 923540 Jim in MN
Jim in MN's picture

I wish to remain steadfast in my call for Dow:Gold 1:1 @ 5,000.  The exact timing is not especially relevant unless you are a silly human daytrader (soon to be extinct due to robot infestation).

We are in the early stages of a Lost Generation for assets in the West due to the No Bond Haircuts/payola policy.  Diversification yes, that's unchanged, but realistic expectations on the real return of a balanced stock/bond portfolio--that is, roughly zero to slightly negative over the next 10-20 years--are advised (even by Bill Gross at Pimco).  Therefore savings must increase and personal spending decrease to maintain any chance at meeting goals.

A gold 'ballast' just makes sense in such a balanced portfolio.  10% was always the rich man's standard, but many here would suggest a trifle higher share (and the rest in canned meatballs and silver buckshot, or something).

This isn't about passion, unless we're discussing democracy; it's just the reality of the situation.  Economic policy dictates the outcome.  The policy is to maintain bankrupt entities at a massive, GDP- and employment-crippling scale.  Simple, no?

Tue, 02/01/2011 - 10:49 | 923566 ColonelCooper
ColonelCooper's picture


Tue, 02/01/2011 - 10:47 | 923555 satansanus
satansanus's picture

selling slv paper waste

Tue, 02/01/2011 - 10:51 | 923572 william the bastard
william the bastard's picture
1980 Gold Investors Still Catching Up

Interest-bearing checking accounts have done better than the metal since its last peak in Jan. 1980, showing the costs of investing for safety

(Bloomberg) — Gold's best year in three decades has yet to match the returns of an interest-bearing checking account for anyone who bought the most malleable of metals during the last peak in January, 1980.


Tue, 02/01/2011 - 10:54 | 923582 spartan117
spartan117's picture

And how much have those dollars lost in purchasing power, you moron.

Tue, 02/01/2011 - 11:11 | 923646 tmosley
tmosley's picture

Oh noes, people who bought during a three hour parabolic blow off have lost money.  That must mean that everyone who ever bought gold in the last 40 years has lost money, right?

Tue, 02/01/2011 - 11:22 | 923684 Silversinner
Silversinner's picture

Cherry picking data troll,you just suggest

somebody going all-in gold on jan 1980.

Gold has no beginning or end date,it's

indestructible and a great tool for wealth

accumulation and preservation.Every

asset class has it's own time and place.

Tue, 02/01/2011 - 11:00 | 923598 Dr. Gonzo
Dr. Gonzo's picture

Yes. It is going to be like the 70's all over again except this time after the parabolic top and they raise interest rates back up to 20% there is going to be another giant head fake. Long time holders of gold thinking they are clever and knowing history are going to sell their gold for a pile of worthless dollars and then cry like bitches when they discover the model was really Weimar Germany all along and not Disco 70's and for the past 10 years they've just been wasting their time and are now like all the other stupid unwashed masses having no gold. And they will look around at several former 3rd world nations where their citizens made it a priority to own gold and be jealous of their better prediciment and it will dawn on them in one moment of clarity that GOLD IS MONEY and always was and always will be. I'm not planning on selling my gold by the way.

Tue, 02/01/2011 - 11:04 | 923611 william the bastard
william the bastard's picture

A gold investor who bought an ounce of the metal at its January 1980 peak would need gold to advance by more than $1,000 an ounce from today’s record levels to come out ahead when 30 years of inflation are taken into account.

People who bought gold in 1980 “have not even halfway broken even,” said Jon Nadler, a senior analyst with Kitco Metals

Tue, 02/01/2011 - 11:12 | 923650 tmosley
tmosley's picture

Drive away, drive by troll.

Tue, 02/01/2011 - 11:27 | 923695 ColonelCooper
ColonelCooper's picture

Better call up troll school again for more advice.  Your drivel may confuse at the Yahoo boards, but we're a little too smart to be swayed by your singling out the eleven people who bought at the top.

0 for 257.

Tue, 02/01/2011 - 11:05 | 923615 almost_have_a_name
almost_have_a_name's picture

Meet the new gold, same as the old gold

Tue, 02/01/2011 - 11:05 | 923616 Printfaster
Printfaster's picture

What is with the Japan Yen?  All the crosses seem to have taken a dumper on the yen.

Tue, 02/01/2011 - 11:13 | 923659 Printfaster
Printfaster's picture

Those trying to bash gold or trying to say it will never be currency, missed out on Econ 101.

The reason that gold will never be currency, or that we will never return to the gold standard was wrapped up in Gresham's law:

Bad money drives out good.

Count on fiat to survive as money.  It will always be bad.

Tue, 02/01/2011 - 11:19 | 923667 Elmer Fudd
Elmer Fudd's picture

People who bought gold in 1980 “have not even halfway broken even,” said Jon Nadler, a senior analyst with Kitco Metals


-Um, what about the guy who bought citibank at 55? Oh wait, that's in 2008 dollars.  Go ahead, listen to JN, you should have 5-10% of your savings in gold, but oh its much too expensive now, its been expensive for years, why dont you wait until it comes down?

Tue, 02/01/2011 - 11:16 | 923668 william the bastard
william the bastard's picture

Gold hit a record high of $875 an ounce on Nymex in January 1980, that’s equivalent to about $2,318.84 an ounce in today’s dollars.

Tue, 02/01/2011 - 11:30 | 923706 Silversinner
Silversinner's picture

Are you just really a jong person and are that

naive to believe that number?!read numbers of

please get yourself some education.

Tue, 02/01/2011 - 11:31 | 923709 watchingdogma
watchingdogma's picture

OK - I think you're full of shit.  Can you show me a trade at $875?  What market?  Where? What was the volume of that trade?  Site your sources...

What was the top tick for Enron?  What's that trading at now?  Top tick of the DOW?  What's that trading at now?  Top tick of  And now?

Tue, 02/01/2011 - 11:36 | 923724 RockyRacoon
RockyRacoon's picture

I don't know what your game is, but Johnny Bravo had you beat hands down.

If you are being paid to post the drivel that you do, some refund is due your employer.

Tue, 02/01/2011 - 11:17 | 923670 Snidley Whipsnae
Snidley Whipsnae's picture

We have had 'floating' fiat currencies in the world since Nixon shut the gold window for foreign soverign redemptions.

The 'floating' fiats do not really float since they are printed and manipulated at will by central banks.

Approximately 5,000 fiat currencies have come and gone since soverigns first had the concept of fiat paper currency.

Gold has been money for 5,000 years prior to Nixons action.

5,000 years of 'gold money' history vs 40 years of fiat world currencies...and, the flat out disaster that the 40 years has rendered unto us today...duh? Whatdaya tink is gonna happen?

Gold will sweep the fiats away. It's happening right now. Suppression is to shake out the weaker hands.

Are central banks selling gold now?

Tue, 02/01/2011 - 11:21 | 923682 TaLoN.NL
TaLoN.NL's picture

Gold Bubble 2011?

Seems more like a dip!

Tue, 02/01/2011 - 11:44 | 923764 Vint Slugs
Vint Slugs's picture

Tyler, how about creating a headline link to Antal Fekete?  It's about time that he started getting his due from major blogsites.  Here's his latest brief remarks on the macro gold situation:


Thank you.


Tue, 02/01/2011 - 14:58 | 924539 w a l k - a w a y
w a l k - a w a y's picture

Tyler, how about creating a headline link to Antal Fekete?

I agree.

Tue, 02/01/2011 - 11:48 | 923779 ColonelCooper
ColonelCooper's picture

Operator: Troll help line, what is the nature of your call?

William: I really need some help, this pasting isn't working out the way they said it would.

Operator: Name and I.D. Sir?

William:  William, # 2376

Operator: Please hold while I transfer you

Elevator music..........

Troll Tutor: William, buddy.  What's going on?

William: These guys keep coming up with like facts and charts and stuff.  Everything you put on the paste list is just making me look like,,,like,, an asshole.  They're calling me things like Troll and Dipshit, and everything I do is going south.  Nothing works; I think these guys might actually be, buhbuh be,,,,right?

Troll Tutor:  Calm down William.  What site are you working?

William: Zero Hedge, Sir.

Troll Tutor:  Dammit William!  You're working off the advanced list!  Fool! You've only been at this for a few weeks.  I TOLD you to stay on the Yahoo Finance and Yahoo Answers for SIX GODDAMN months! THEN, if things were working out, you go to WSJ.  How did you even get the advanced list yet?

William:  It was stuck to the back of my handout booklet.  I'm sorry, I didn't know.  I really didn't know.

Troll Tutor:  Log out William.  I need to send somebody over there to repair the damage you've done.  YOU, I want to report to the training center next week.  You're going to redo your orientation before I pay you to paste on ONE MORE THREAD!  Dammit.

William: Yessir, sorry Sir.  Please give me another chance.  My mom said that if I couldn't keep this job I was going to have to momve out of the basement.  Please Sir?

Dial Tone..............................

Tue, 02/01/2011 - 11:59 | 923820 Sean7k
Sean7k's picture


Tue, 02/01/2011 - 13:44 | 924226 Bay of Pigs
Bay of Pigs's picture

Zing! Nice one Col.

Tue, 02/01/2011 - 15:28 | 924681 Cathartes Aura
Cathartes Aura's picture

hilarious!  well done Colonel.

Tue, 02/01/2011 - 11:59 | 923816 gwar5
gwar5's picture

PMs have a long way to go. The long term trend is strong and will only be exacerbated by periodic geopolitical instability.

Tue, 02/01/2011 - 12:03 | 923833 Stuck on Zero
Stuck on Zero's picture

I follow gold sales on eBay.  Over the last six months there has been a drift toward distress selling. More and more gold coins and jewelry come onto eBay from pawn shops and families who need the cash for expenses. 

The question is ... how much gold is out there that will come to market as economic conditions deteriorate?  Will this depress the price of gold?

Tue, 02/01/2011 - 12:08 | 923851 ColonelCooper
ColonelCooper's picture

As times get worse, lots of people will be selling shit to pay next month's mortgage.

I personally don't think selling gramma's wedding ring for it's gold content is going to have much of an effect when central banks are strengthening their positions.

Tue, 02/01/2011 - 12:20 | 923894 FranSix
FranSix's picture

If all of the central banks dishoarded their gold, it would only supply the gold market for several weeks.

Tue, 02/01/2011 - 12:07 | 923850 FranSix
FranSix's picture

I think there will be major differences between the bull markets of gold in the 1970's and the bull market after 2000.

Most people are fully expecting a bull market blow-off top, in the very same type of blow-off top that oil prices had in 2008, but it much more likely that the wave-form will make an extended three-wave in elliot wave terms.

Anybody making an observation on wave-forms would immediately jump to the conclusion that gold has formed a one-wave extension, which would limit the upside to ~$2150/oz. U.S.  The monthly linear gold price chart in nominal terms with no modifications certainly supports that point of view.

Gold can still form a five-wave extension that would fulfill the five-wave blow-off with extreme numbers envisioned by hyperinflationists.  It could still certainly happen.

For gold to fulfill this kind of five-wave blow-off, it would have to first DECLINE or TRADE SIDEWAYS to the bottom of its upwards-trending channel, before making a blow-off top, trading to just above the prior peak of ~$1033/oz. U.S. But the gold price is much more conforming with an extended three wave in the log scale chart so far.

A decision point would probably be how well the gold price matches either wave-form.  I would say that the extended one-wave analysis would have to conform both in the log-scale and the linear scale charts and be unmistakeable in both styles of chart.  But so far, the differences between the linear scale and the log scale chart are too great, pointing to an extended three wave. Monthly Gold Chart

Tue, 02/01/2011 - 12:44 | 923979 topshelfstuff
topshelfstuff's picture

I'll post this here. It seems my PC is not cooperating, and my almost completed writing on this just vanished. I'll eliminate a lot of what was in there, some having to do with the IMF, and the fact that as we crossed into 2011 so too did the IMF, as it needed to deal with the 12/31/10 deadline of the last 5 year plan  ---and for those who noted thier SDR's remained a combination of the same 4 currencies, the same 4 using QE, US, UK, EU, Japan

Here's what I'm looking for, and may very well be connected to ongoing Global events.

This Thursday is Chinese New Year, tomorrow their New Year's Eve----not just China, most all of Asia celebrates this most important Holiday for them, it lasts a Week, from Feb 2 through to Feb 8

Recall how we, the US, have been pounding the table for China to ReValue the Yuan, and always using 40% as the minimum, for starters, the amount needed to more level the playing field, in the opinion of our "Leaders"

I'm looking for this ReValuation, but not just by China. I'm looking for a joint, coordinated, and simultaneous "adjustment"---taking this route results in No Change in their Trade, the only change is with the USD --- a line has been drawn, I call it WestBloc and EastBloc, but has nothing to do with Geography. I believe we will see China, along with most all of Asia, perhaps the ASEAN 3+10 Grouping, most of South/Latin America, some from the Mid-East already decided, and ANY other country that wants to join in with this joint Move. There are some countries you could call "Fence-Sitters"....and Egypt considered one of them. Most all of them have a similarity....the obvious one being; having a US approved, often implanted, PUPPET Leader, and The People wanting to be less tied to US Control.

Think about what a 40% Increase vs the USD in all their currencies will do, especially now. The Benefits flow to both The People and the country.

For The People its a huge leap in Purchasing Power, a leap that would neutralize the Increasing Costs in Commodities quoted in USD but payable within their countries with the equvalent, Food & Energy the most important for The People now. Isn't this something sorely needed right now in these countries.

Benefits to all the countries too, as they are in a Build-Up phase, so a 40% DISCOUNT on ALL & ANY Commodities, Globally Priced in USD's, though within the Countries paid and quoted in their Currency's USD Equivalent

I think this may very well be the cause of what's happening now, because there is an important decision that needs to be made, since I believe China and the EastBloc would most likely make this move following and beginning with their New Year---making all the fence-sitter nations needing to make their decision and move...soon

[[[ let me add 2 items also---just  recently China mentioned that 99% of their Trade Imbalance was solely from the US....and China also reiterated to their People that Buying Gold & Silver was a good idea to consider ]]]

Tue, 02/01/2011 - 15:48 | 924765 Cathartes Aura
Cathartes Aura's picture

very interesting post topshelfstuff, re-focusing on the global perspective is appreciated.

there cannot be a "world currency" until nationstate monies are more "equal" in value. . . fascinating of course to watch China encourage the citizens investing in PMs, while the US acts as if they don't exist (pumping the paper/controlled stock market).

interesting times, yes.

Tue, 02/01/2011 - 13:05 | 924069 jeffgroove102
jeffgroove102's picture

I personally don't favor a collapse in currencies, as I have loved ones whom are not invested in PM. I also don't understand the bulls whom get angry at the bears, just take the opinion for what it is and move on. Have a physical supply and a trading account, that's all. I personally think their can be a limit to how high things can go as price sorta limits the actions people can take in regard to a market. If their is no money for it, then their is just no money. That being said, given the public officials that we have these days, I would buy PM as a hedge against their hubris and unbridled arrogance. Bernanke, obama, and geithner whom have never managed a balance sheet think they are god, and still subscribe in secret to the Dick Cheney addage"deficits don't matter".

It is quite unfortunate that the US has become a nation by and for, the banks, but it is what it is, plan accordingly. The very least you need to know about precious metals investing, is that politicians hate pain, and like the invisible tax of inflation. Unfortunately as we are seeing in the middle east, the tax is showing up in the food prices. That being said, "Can gold go much higher?". Who knows, I prescribe to the nassim taleb theory that the markets are much more of a random walk then anything, and sometimes even technical analysis is about as good as coin flipping, but that is another topic. Clearly, when trust breaks down in the markets, it is reflected in the price of gold. Not that I am an end of the world doomsayer, but when you have populations that are so dumbed down, and vote in the lowest common denominator(see barack obama), then you have to be cautious and have the store of value(gold) IMHO. Despite, being a gold bull, I encourage gold bears to post, because it gives me viewpoints that I may not consider.


Tue, 02/01/2011 - 13:06 | 924073 PulauHantu29
PulauHantu29's picture

Gold sellers have been working overtime to fill Buy orders....Dictators running away in the Middle east grabbing their gold........Central Banks buying gold for their reserves...



All adds up. The Fed can suppress prices only so long beofre the deluge upwards to $5,000 per ounce.

Tue, 02/01/2011 - 13:08 | 924086 I Am The Unknow...
I Am The Unknown Comic's picture

I wanna be a troll like William you bastard so I'm going to pop in for a random negative comment against PMs and then never look back at this post and never reply to anyone who comments on my misleading propaganda.   So, since this is my first time, here it goes:

"Saying that 1 oz of gold could buy you a suit in ancient Rome and the same 1 oz could could buy you a suit today is complete bullshit.   Because nobody accepts the Aureus as currency anymore it is therefore worthless.  You can't go into a suit store and buy a suit with 5 Aureus.  So this proves that throughout history, gold has gone to zero.  You are all wasting your money buying gold." 

How's that for a first try? 

Tue, 02/01/2011 - 13:46 | 924242 eddiebe
eddiebe's picture

Hahahahaha, but what about the byzant?

Tue, 02/01/2011 - 14:49 | 924504 ColonelCooper
ColonelCooper's picture

I'm giving you a C+.  

5 out of 5 possible points for putting the "Gold is not Currency" theme into your own words.  You get 3 out of a possible 5 in the attack portion of the comment.  "You are all wasting your money..." is a start, but without calling bugs names like moron, redneck, doomer etc.. the attack loses its much sought after vehemence.  Also consider that extra points will be given for witty comments about the bug sitting on "canned hams" or similar bunker items.  You get 0 out of 5 however, for neglecting to point out that gold is not edible.  Remember all good troll posts MUST include this theme.  In order to get all five points in this category, the troller must tie an individuals lust for wealth to the starvation of people in third world countries.

Please do not lose heart; you will have ample opportunity to boost your scores before your next review.


Tue, 02/01/2011 - 13:43 | 924223 eddiebe
eddiebe's picture

Which ever major economic power links their currency to the precious metals will gain a massive economic advantage. Their ability to sell bonds even at very low rates will go through the roof. Don't make the mistake of thinking this has escaped Ben's and the bankers train of thought. When Q. E. doesnt work anymore, the fed will link the greenback to gold ( when gold is much higher in fiat terms ) and treasuries are paying record interest rates. (because nobody wants the shit IOYou's anymore) 

 That will be when the blow off top will happen in gold, just like it did in the 70's. That is when you want to sell SOME gold and go long the bond ( and therefore the greenback by proxy.)

 This is Stuart Thompsons theory ( in short ) and it makes total sense to me.

 The only way the bankers will give up the printing press and do something drastic like a gold/silver link, is when they are forced to do it and or when it is to their advantage.

 Think of all the money they made by selling the marks their cheap gold in the early 70's and then sold it back to them  at vastly inflated gold (by comparison)and taking the other side of the bond trade from the taxpayers. They've been getting paid ( I'm not sure but probably) well in excess of 10% interest from uncle Sam on that trade for the last 30 years. ( Look for the bond to tank after this bull run.)

 Look for similarities in the future.

Tue, 02/01/2011 - 13:57 | 924298 DosZap
DosZap's picture

Other than China, the Muslim countries,and India are capable of doing it.

Tue, 02/01/2011 - 13:56 | 924293 jeffgroove102
jeffgroove102's picture

Ten reasons to be long gold from Nomi Prins(Author of "it takes a pillage") This is what alot of people miss completely in their analyses.

Top Ten Ways Things Could Get Worse from Here
Amazon-exclusive content from author Nomi Prins

The government has nearly convinced the public they have everything under control, when that’s far from the case. In fact, everything could go downhill fast. Here are ten all-too-likely scenarios I look at in my book, It Takes a Pillage:

1. The actual bailout has quietly ballooned to $16 trillion dollars (not including over $3 trillion set aside for money market funds), most of it given out with no strings attached. Wall Street firms could continue to tout the myth that ‘talent’ must be paid for – now with stupid sums of bonus money, funded by the American People.

2. The stock market, which has rallied substantially since the government started giving out free money to the banking industry, could tank on the realization that if that money needed to be paid back any time soon, the banks wouldn’t be good for it.

3. Because bigger is better still seems to be Fed policy, JPM Chase could acquire Bank of America – Merrill Lynch, creating one of the largest, federally subsidized banking firms in the world.

4. Because the bigger just can’t help getting badder, JPM Chase could also acquire Citigroup, and we’d be living with a monopoly economy.

5. We could sink into the delusion that the Obama administration has actually done something to restrain Wall Street, lulling us into a false sense of security. Then the remaining big banks will screw us again.

6. Congress could continue to ignore history and never reinstate the Glass-Steagall Act. That act made banks smaller, more specialized, easier to regulate and less expensive to bail out. Repealing it lead to this mess, and there’s barely a whisper heard in Washington of bringing it back.

7. As a Fed approved bank holding company, Goldman Sachs could buy a lot of small banks just to get access to all the money in savings and checking accounts to gamble with. Plus they’d have that great $250,000 FDIC guarantee they get per account. This would make them the biggest bank in the country.

8. Every bank and government agency with access to some aspect of a federal bailout could max out their subsidies chips at once – pushing the full bailout cost to over $26 trillion.

9. Many mid-sized and smaller banks didn’t need a bailout and have been better at allowing consumers access to credit. The largest banks, flush with federal funding and a poor record of helping average Americans, could buy them all up.

10. The Fed could continue to operate in secrecy, despite multiple moves by Congress to push for a full audit of its largesse. Right now, only the Fed knows what the real worst case scenarios might actually be.

Tue, 02/01/2011 - 14:33 | 924429 JonNadler
JonNadler's picture

william the bastard


If you would join the troll team (which i am the president of)

you have to come up with something better that gold was 800 in 1980 and if you bought you lost your money. even my grandmother is not buying that one anymore 

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