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Mr. Denninger and Gold or Why the Dollar-Deflationists Are Wrong
Those who know Mr. Denninger know that he, well, for lack of a better word, hates Gold. It only goes to show the level of disinformation and ignorance prevalent in our society when even smart people like Karl fail to get it. From what I hear anybody even mentioning the word Gold runs the risk of being permanently banned from one of his "forums". In a recent commentary entitled "Ten Things for 2010" he was at it again bashing Gold. Here is what he had to say:
We're not looking at hyperinflation folks, in my view - we're looking at a deflationary collapse…If you fear hyperinflation do not look to Gold, instead buy a small (5% of your total portfolio) position in far out of the money LEAP CALLS on the major indices, spread across them. Why? Because (1) the tax structure on gold is unfavorable, (2) gold has never performed well on a contemporary basis .vs. inflation and (3) you can't eat it. If you try to get around the tax man structure you're going to get creamed; governments can and WILL prevent that from working. My recommendation thus is to buy insurance against a hyperinflationary event using instruments that do not try to evade the formal financial structure, are levered (to get around the tax hit) and are defined risk (so as to avoid losing your ass if you're wrong.)
Really Karl? LEAP Calls? In a hyperinflation? That’s a good way to lose 5% your portfolio. I’m assuming you know what hyperinflation is - in a hyperinflation the currency becomes worthless, as in toilet-paper. Why would anyone want to get paid their "winnings" in a worthless currency, assuming there are stock indices and counterparties left who can pay off these worthless winnings when countries collapse?
And the tax structure is FAR more favorable for Gold than ANYTHING else, if only you are not in the habit of bending over. Buy cash and keep your mouth shut – it’s very simple – or just move to another country where the government is not as intent on raping its citizens. I know privacy is a foreign concept in America these days, but still. All your other assets, including stock market profits, are fully open to the government and there is nothing stopping them from taxing them to the hilt. Trust me, when it all hits the fan Gold in your personal possession will be your best friend.
Which brings me to my favorite part:
gold has never performed well on a contemporary basis .vs. inflation
Poor Gold. The thing gave an instant 75% profit when Roosevelt confiscated it in 1933 and rose 24x (yes, that’s 24 TIMES) from $35 to about $850 in a space of 10 years from 1970 to 1980. And even during the past decade from 2000-2010 it has risen 5x outperforming ALL asset classes. Overall, from 1933 till date it has risen about 60x. That is, if you simply held Gold since 1933 you would be now 60 times richer, at least in nominal terms. Yet nobody remembers all that. All they remember is the lousy 20 years from 1980-2000 when the full force of the derivatives market was brought to bear upon it to suppress it’s price (well, that’s a topic for another post), as is being done even now absent which it would have easily crossed 10x (from the 2000 low) by now – which it will at some point in the future as the market cannot be suppressed forever. Indeed, the longer the suppression, the more forceful the eventual price rise as happened when the London Gold Pool collapsed during the late sixties soon after which Gold shot up 24x during the next decade. If you’re not that devoted a disciple of Karl I suggest you hang on to your Gold for a little while longer. In my humble opinion, it will outpace all gains in all other asset classes since the creation of the dollar – in not only nominal, but real purchasing power terms.
And then there was this again:
The last time I checked they didn't take 100oz bars at WalMart, but they sure do take $100 bills
And the last time I checked Karl, they weren’t taking stock certificates and bonds either. Also, there was a funny thing I noticed: there was NOTHING stopping me from getting dollar bills, euros, yen – you name it – for my Gold. In fact, everytime I sold some Gold I got even more paper tickets than the last time – which meant that I could buy even more stuff with the same amount of Gold. How surprising, no?
Well, Karl was definitely surprised:
Precious metals will not be a safe haven: Clean miss. Gold and silver have both performed well.
And talk about reaching wrong conclusions:
Discovery that the metals market has been "polluted" to the point of irrelevance would mean that those around the world who had bought and were holding alleged gold bars that in fact aren't gold had tendered good money for nothing. This would be a monstrous deflationary event - after all, the definition of deflation is the destruction of money, and that's exactly what would have happened, just as if you took a stack of $100 bills and burned them in your back yard.
No Karl, the bills still exist – in the bank account of whoever was paid to obtain the said Gold. It is the Gold which is discovered to be no longer existing, thus causing the apparent supply to be further reduced and spiking the price.
Karl thinks he’ll be safe watching these “fireworks” from the sidelines. Not so Karl. By not buying Gold (and holding dollars), you are smack in the middle of them. You are not simply “missing out” on some investment gain but stand to lose everything as the purchasing power of the dollar is decimated. This is why those advocating holding only paper cash as a “safe alternative” are in fact harming those who listen to them.
Now don’t get me wrong - I agree with a lot of what he says in general – he’s a good reporter (which is why I keep him on my “must read” list) - but when it comes to Gold, Karl simply doesn’t “get it”. First of all, when you talk about deflation you have to ask the question, “In terms of what?”. Most people ala Mish, Prechter, Karl et. al. when they talk about deflation are referring to deflation in terms of the dollar, i.e. they are, in fact, “dollar-deflationists”*. One can’t really blame them since the dollar is considered by most people as “money” today and is therefore their frame of reference. But this is a critical error of perception that will prove fatal to those who hold their life’s savings in dollars when it all finally implodes. The dollar today is just another fiat currency created at will out of thin air by bankrupt and corrupt governments and their Central Banks. It is an illusion of money, not money; which brings us to the question of:
What is money?
This is a topic which can fill an entire book, but I’ll just quote the best one I found (Mises):
In the marketability of the various commodities and services there prevail considerable differences. There are goods for which it is not difficult to find applicants ready to disburse the highest recompense which, under the given state of affairs, can possibly be obtained, or a recompense only slightly smaller. There are other goods for which it is very hard to find a customer quickly, even if the vendor is ready to be content with a compensation much smaller than he could reap if he could find another aspirant whose demand is more intense. It is these differences in the marketability of the various commodities and services which created indirect exchange. A man who at the instant cannot acquire what he wants to get for the conduct of his own household or business, or who does not yet know what kind of goods he will need in the uncertain future, comes nearer to his ultimate goal if he exchanges a less marketable good he wants to trade against a more marketable one. It may also happen that the physical properties of the merchandise he wants to give away (as, for instance, its perishability or the costs incurred by its storage or similar circumstances) impel him not to wait longer. Sometimes he may be prompted to hurry in giving away the good concerned because he is afraid of a deterioration of its market value. In all such cases he improves his own situation in acquiring a more marketable good, even if this good is not suitable to satisfy directly any of his own needs.
A medium of exchange is a good which people acquire neither for their own consumption nor for employment in their own production activities, but with the intention of exchanging it at a later date against those goods which they want to use either for consumption or for production.
Money is a medium of exchange. It is the most marketable good which people acquire because they want to offer it in later acts of interpersonal exchange. Money is the thing which serves as the generally accepted and commonly used medium of exchange...
(All emphasis mine)
Money was created by the markets; by humans trading goods and services amongst themselves; by the need for indirect exchange. This is one of the major misconceptions of the dollar-deflationists - that money is what the government says it is. Although Governments do their best to convince people otherwise, including putting a gun to their collective heads via legal tender laws, they cannot dictate what money is – not for long periods of time anyways – which is why whereas Gold has been money for thousands of years, you’d be hard pressed to find a fiat currency that has existed past a few decades. The present period is one such short period of mass delusion where the majority has been convinced – including, apparently, Mr. Denninger - that the colored pieces of paper being printed by various men behind the curtains is, in fact, money.
Gold is the commodity that humans chose to be “money”- the most marketable good. It didn’t happen overnight, but over thousands of years of evolution. Billions of trading decisions over centuries made by free men of their own volition – the collective wisdom – installed Gold as money. It needs no government violence to enforce as money because the force of nature that is the market chose it to be money. Indeed, it was the governments who hijacked the free-market commodity money of Gold into “backing” their various fraudulent paper money scams using fractional reserve systems. Why? Because the power to create money is the ultimate power. It is not for no reason that Mayer Amschel Rothschild said:
“Give me control of a nation's money and I care not who makes her laws.”
And why do we know Gold is still money today? It’s simple – Gold has the highest stocks to flow ratio of any commodity i.e. its total above ground stockpile is very large compared to its annual production which is NOT the case for other commodities. The reason for this is that while other commodities are primarily mined for consumption, Gold is not consumed but hoarded. Its primary function is that of a store of value – a wealth reserve. Why do you think the Central Banks keep Gold on their balance sheet even today? Right. Even the Gold jewellery demand in countries like India is, in fact, investment demand in disguise – hidden firmly behind veils of religion and culture to protect their real wealth from the depredations of various rulers and governments that have pillaged her over the many thousands of years of her existence.
Moreover, even though most people don’t realize it, even today the dollar is only acceptable as money because it is indirectly “backed” by Gold (via the derivatives market) i.e. you can get Gold in exchange for paper dollars on the open market. The proof of this lies in the fact that were, for some reason, the convertibility of Gold into dollars suspended today [on the open market], the dollar would instantly collapse.
Gold IS Money – not the dollar, not ANY fiat currency. Period.
As the king of banksters J.P. Morgan himself testified before the Pujo Committee in 1913:
“Gold is money and nothing else”.
The Fiat Money Scam
Throughout history no fiat currency has survived – ever. There is a reason for it. Paper money is inherently a scam – a scheme to loot the people who actually produce the goods and services in the economy. Just because it is legalized and its perpetrators hold fancy government titles does not mean it is not a fraud. The issuer can create unlimited pieces of paper – or computer bits today – at essentially no cost and use them to appropriate real goods and services in the economy. So whereas you and I have to actually do real work to procure it, the printers of the currency can basically print whatever they need. This is why there is a constant inflation of money supply under a fiat money regime as has been the case since the Federal Reserve was established in the US in 1913, as constant theft requires constant creation of new money. The evidence of this inflation is the annihilation of the dollar’s purchasing power since then:
The Dollar's Purchasing Power Since the Creation of the Federal Reserve in 1913
This is why we have legal tender laws making the unconstitutional Federal Reserve Notes legal tender with the monopoly of the private banking cartel (i.e. the Federal Reserve) enforced by the courts enabling the banks and the government to essentially enslave the populace. This is also exactly why the founders of America prohibited anything except Gold and Silver to be used as money, and why the governments go to great lengths to suppress their price. Indeed, America today is the very antithesis of what its founders intended.
The fraudulent money system today is the source of all the rottenness. The various scams in progress today - the entrenched corruption - can be all be traced back to it. The rot is at the very top of the pyramid from which the fountain of fiat money emanates. It is indeed telling that the two World Wars occurred right after creation of the Federal Reserve. Further, no amount of prosecution will fix the system because the prosecutors themselves have been corrupted. As Ayn Rand said:
"When you have made evil the means of survival, do not expect men to remain good. Do not expect them to stay moral and lose their lives for the purpose of becoming the fodder of the immoral. Do not expect them to produce, when production is punished and looting rewarded. Do not ask, 'Who is destroying the world? You are.”
It is too lucrative a scam to be given up voluntarily by those owning the printing press while the going is still good. It is like expecting a thief to stop stealing while not only being immune from any sort of legal prosecution, but actually having the power to create laws. The system cannot be fixed - the only way this will stop is a collapse of the existing system so that a new one can be built – and we are in the middle of it right now.
Deflation in Terms of Gold, Hyperinflation in Terms of the Dollar
By its very nature, due to economic control being concentrated in a few hands and fraudulent creation of money out of thin air, the fiat money system creates massive misallocations of capital and resources throughout the economy. The economy under a fiat money system is no different than a centrally planned one, such as the Soviet Union. Moreover, since the entire world is on a fiat money standard today – with the various fiat currencies themselves being “backed” by the fiat dollar - misallocations of capital have occurred throughout the world resulting in malinvestments. These misallocations are both material and human, as exemplified by the skyrocketing unemployment rate. The malinvestments now need to be liquidated i.e. converted to the most liquid form – “the most marketable good” or money - so that the capital can be reallocated to more productive uses. Loans are called in as they can no longer be serviced. This results in deflation, i.e. rising demand for money in relation to everything else, and consequently falling prices and increasing purchasing power of money. Moreover, economic uncertainty means that more and more people want to hold “the most marketable good” i.e. money thus further increasing the demand for money.
Now normally – since a lot of debt-money is destroyed in the process and there is a rising demand for money - this would lead to a rising dollar (in terms of purchasing power, not the meaningless DXY), but that would mean that the whole “theft-via-inflation” scam would fall apart. The government can’t tax a rising purchasing power! They simply CANNOT allow deflation in a fiat money regime as it would defeat its very purpose – that of allowing them to appropriate resources from the rest of the economy. This would threaten their very existence. This is why holes created on the banks’ balance sheets by defaulting loans – which would normally create deflation - are being eagerly filled by the Central Banks. This is why the Fed is now simply printing money out of thin air – both overtly and covertly, with the derivatives market being cleverly used to absorb the excess money creation (so you were wondering why the derivatives monster is increasing exponentially in size?) - to fund the government’s operations as there is not enough money in the market to lend to the government. Hiding under esoteric nonsense terms like “quantitative easing” does not change the fact that it is simply creating money via ledger entries and outright STEALING.
Whether they “allow” it or not deflation WILL take place – not in terms of dollars, but in terms of Gold. It’s simply forces of nature – the market – at work. The dollar deflationists expect the dollar to suddenly reverse its 100 year long drop in purchasing power. Ain’t gonna happen. What the government is doing now – i.e. spending raw printed money into a contracting economy - assures us that we will end up with the hyperinflation of the dollar. The only thing they can do is prolong its demise with intermittent bouts of induced apparent “deflation” to keep the inflationary scam going a little bit longer - remember 2008? (h/t Gary). Initially, of course, many people (such as Mr. Denninger) – mistakenly thinking the dollar to be “money” – will rush to its perceived safety causing the dollar to rise. But ultimately, as more and more people realize that the government will not – indeed, cannot – stop inflating the currency into oblivion, will choose to hold the ultimate “marketable good”, i.e. Gold. This is the reason why Gold is the only asset class at new all time highs. Rest assured, even the big boys are holding Gold in their private vaults, not dollars. Is there any sense in holding something you can create at will?
Ultimately, there can only be deflation in terms of commodity based money such as Gold since it cannot be created out of thin air. Indeed, we have already been deflating in terms of Gold for the past decade. Just look at the various commodities, the stock market, real estate – pretty much anything - priced in Gold – it’s all going down.
SPX priced in Gold (2000-2010)
As capital goes down the liquidity pyramid in search of the most marketable good, all the money derivatives – including the dollar – will collapse returning all capital to where it came from: Gold; a global reset, if you will, with only holders of Gold left standing when the dust settles:
Exter's Liquidity Pyramid
You Cannot Eat Gold, But You Can’t Eat Dollars Either
That has to be one of the lamest arguments against Gold – ever. It is the sign of a closed mind. It shows that you don't know ANYTHING about human history, which is not surprising considering the sorry state of our government controlled "education system". You cannot eat FRN’s either – why not just burn them? The function of money is not to be eaten but to be used as a medium of exchange and store of wealth i.e. to get what you want to eat at an indefinite time in the future. And while with Gold you are assured of getting at least something in return in the future, whether it is an edible product or not, it is not so with dollars. Fiat money has a problem in that it lasts only as long as the government enforcing its use does. In times of economic uncertainty, such as today, when the very survival of various governments is at stake (yes, that includes the US Government) do you want to hold Gold or their worthless colored paper tickets? Gold is the only money that has outlasted empires and governments - no fiat currency has. Think about it - what will your dollars be worth when there is no government to enforce it as legal tender? Yup – zip, zilch, ZERO. And to those who say that we will not need Gold (but something else like food or guns) in such extreme circumstances, I say that empires and governments have constantly collapsed throughout history but it did not mean the end of the world. As long as you believe that human society will exist and there will be division of labor, you need money (i.e. Gold) – because:
a) You cannot store indefinitely all your needs especially perishable items such as food.
b) You do not know with 100% certainty what you will need in the future.
c) You cannot produce/manufacture everything that you will need today or in the future by yourself.
Even if the government does not collapse there is nothing stopping it from devaluing the currency at will in a step function thereby instantly appropriating a vast amount of your savings, as has already happened not once but twice with the dollar since the creation of the Federal Reserve. I mean really, the facts are so obvious that you have to be either be in total and complete denial (perhaps due to having already put all your eggs in the dollar basket) or in collusion with the people promoting the paper money scam.
Gold is the currency beyond Governments. It is the most liquid form of money accepted throughout the world – the true reserve currency of the world - whereas Dollars, Yuans and Euros etc. are only guaranteed to be accepted within their own respective countries, and as long as their respective governments last. Why would you want to tie yourself down to the paper currency of a particular nation, especially in times of such turbulence? It points to a very limited sphere of thinking when you advocate that holding only dollars is the best strategy. It is a fallacy to believe that there is no refuge outside the system; that you have to be trading paper tickets all the time to “keep up” with the dilution of your purchasing power or just stand by idly holding dollars while the government rapes you. Gold is your refuge outside the system.
Got Gold, Mr. Denninger?
*In general we can state that they are “fiat-money deflationists” since the process of money creation is same in all the countries i.e. money is created as debt and the collapse will follow a similar route. The only caveat in my opinion is that since the dollar backs all the other fiat currencies, it *might* collapse last. Also, to keep things simple, for the rest of the discussion, we’ll simply use the term “dollars” with the understanding that it can be used interchangeably with the general terms “fiat currency” or “fiat money” since it is one itself.
For an excellent discussion refuting the dollar-deflation theory and why the dollar WILL eventually hyperinflate, please refer to "No Free Lunch".
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Pretty solid Mr Gekko. The Prechtorites don't seem to understand that inflation is just the irredeemable dollar deflating in terms of gold. Which means inflation IS deflation. To separate the two is to fall into the hands of the 'money managers'.
Regards the post 1980 fall in the 'price' of gold, the most convincing argument I've found I've also posted; www.goldstandardinstitute.com/sections/articles/gold_and_money.html
There is a link to the original article back in the archives.
Excellent article, Mr. Gekko.
I have often wondered what might induce Mr. D to ignore the best way to opt out of a corrupt and failing system. To be charitable, perhaps he is merely confused by the clouds of fiat paper and squid ink?
It is way past time to move into 'hard' assets, especially ones with an ancient and venerable history!
Reuters:
Budget Minister Francois Baroin indicated on Sunday that France should not take for granted its AAA rating, which allows Paris to borrow relatively cheaply on international markets and finance its big budget deficit.
"The objective of keeping the AAA rating is an objective that is a stretch, and it is an objective that, in fact, partly informs the economic policies we want to have," Baroin said.
See the Portuguese movie, "The House of Sand". The storyline is of a desperate move by pioneers to a wasteland to set up a farming/herding venture. The master dies, and the wife and daughter left stranded. They eke out a survival of sorts, always hoping to escape back to city civilization.
When the opportunity does finally come, many years later, the matron produces oily paper bills, obviously hard hoarded and counted innumerable times, as the nest egg with which to restart ruined lives. Their transporter sees and scoffs. Those bills are worthless, he says. The gov't has changed just as innumerably and so the currencies.
House of sand indeed. Do not build a great house nor a great life upon a foundation of sand. Paper money, being the arbitrary value bestowed by capricious men upon a claim ticket of no intrinsic worth leaves you perpetually exposed to the malice and graft of untrustworthy counterparties. We are in the opening stages of a desperate scene for global gov'ts. One's accumulated fortunes are of no concern of theirs. Neither is its preservation.
One of the greatest lies in the world is that a currency is a stable store of value. It has no independent definition but only that which a gov't increasingly exposed as duplicitous and depredatory gives it hour to hour.
Every scale which dispenses your essential goods is constantly checked and its calibrations minutely defined (i.e. gas pump, produce scale, weights and measures) to bolster the confidence of the marketplace.
All that is, except the very most important, the one chase perenially by every consumer and labourer, paper money.
It will show itself a false staff, and collapse under your weight when once you come to need its support in your direst hour of need. Then one will know what it is like to have fallen and be alone, and unable to get up.
A quick note just to point out that that film is actually Brazilian.
Fernanda Montenegro is a brilliant actress...brazilian cinema remains a well-kept secret
well done.
Fxxking-A.
Great post and reference Alex.
+100
The latest from James Turk, here is a small part of his post:
http://goldmoney.com/is-gold-in-a-bubble.html
GG...
Since nobody has seen fit to compliment you on your outstanding essay, I will. Brilliant job.
It is unfortunate that Mr. Denninger has to be on the receiving end of your tour de force, since I have learned a lot from him during the year or more that I have been reading his blog, and he is unquestionably brilliant and an original thinker in many ways, and I respect his intelligence, energy and intensity.
But the fact remains that he does have a blind spot when it comes to gold, which I cannot understand since his position is so illogical.
Anyway, thank you for the time and effort you took to have constructed this excellent exposition, which I intend to print for further reflection and to forward to many and sundry.
Few have the ability to distill high-level concepts in a way that is approachable by ordinary people. "Popular" economics of this sort is needed more than ever to raise the awareness of so many who have been lulled over the decades into stultifying passivity. For most it will be too late, but for some your erudition may possibly be the difference between life and death in the years to come.
Thank you for your kind words, SamThomas.
Great stuff Gordo.
What is it with KD?
He's like the guy in the 'Constant Gardener' that can't help but work for the system and turn people in.
Mai bpen rai - There is ZH.
+1000 (Inflation)
+10,000 (for thinking ahead)
Excellent comment and excellent movie.
On a pre-Euro trip to France I handed a cab driver a 20 franc note left over from another trip a couple of years before. He tossed it back. Worthless. Apparently the currency had been changed and everyone had to swap their franc notes for the new ones. When governments do this there is usually a grace period but after that anyone stuck with the old paper might as well burn it. This is a useful strategy for finding out how much "mattress money" is out there there and a good reason not to hoard banknotes, aside from inflation risk.
Being a paranoid sort, I can easily imagine a similar recall of US FRN's. Only in this case only a fixed amount would be replaced with new bills; the rest would be put in a savings account (for your own protection of course) in the form of Treasuries.
And the Euro's introduction itself. Lets see, the stories from Portugal, Italy, Greece, and Spain were particularly heart-wrenching. All of the "sales" going on to laund ..er.. reacquire all of that forgotten (might I say hoarded) money that was invisible to the tax man.
- Ned
good thinkin 7tree, time to exchange those old bills for junk silver.
I wouldn't call you paranoid at all. What you fear is a very plausible end game.
Kind of like North Korea did last year, and Argentina is currently doing.
You are correct. However, only in the sense that the gold coins they hawk have 30 milligrams of gold plating on them (the 4 pixels high small print on a 1080 pixel screen tells you so) and cost their fools anywhere from $29.95 to around $60 a coin. At a gold spot price of ~$1200/oz, with 28.3 grams to the ounce, 30 milligrams of gold on the iron slug 'coin' is worth about $1.27. So, at the low ball price of $29.95 per coin, that is $28.68 profit or 96% profit margin.
Ummm... That woud be 31.1034768 grams per troy ounce.
Troy weight is the traditional measure of gold.
http://en.wikipedia.org/wiki/Troy_weight
Wouldn't want you short changing yourself 2.75 odd grams per ounce of gold.
You are correct.
In contrast, perhaps, to those officially-sanctioned slimeballs who hawk equities in a patently obvious rigged casino called "the stock market", and who also hawk the exponentially-expanding and unpayble debt of spendthrift governments as "the ultimate safe haven", on the continually running infomercial for the same called CNBC?
Thank you for pointing out the ludicrous alternative. I had to log in just so I could junk the guy.
So, what do you invest in, Mr. Dim-bulb? Or doesn't the paper route yield enough after you pay rent to Mom? We are all breathless in anticipation of your suggestions. (Told ya this was gonna be fun -- see below.)
I invest in VXX and levered ETF's. I made about 60% in my portfolio since April 26th.
How much did goldbugs make since April 26th? Oh wait. Their portfolios are even to slightly down... for now.
1000 bucks at 60% equal 600 bucks
but your full of shitola ,, an out of work zit head ,
acting like a big shit in a pile of manure
it was just a couple months ago you stated that if gold got back to 1200 you would eat your hat ,
what will you say at 1500 gold, as December appears ,
hope your are working some where by then , of course you can keep the nightly pizza delivery route
jut wash your hands after squeezing the zit,, nobody likes zit cheese/
and put your economics 101 Keynesian text book down as you need to review before making absurd statements.
a naked juvenile acting like a big shot ,, and out of work to boot.
work on making a life ,, experience , and the like ,
30 year olds are legion and full of imaginary knowledge ,
I have as well. It's between vxx, skf, and qid for me. I keep a 15% daily limit sell on all of them every day from the previous day's high. Then I buy them back on low volume days (usually Mondays). Then for fun I've been in and out of puts on wfc, because fuck'em, they're lying sacks of shit.
I'm afraid of putting the sell limits on these short etfs and vxx. I feel like they'll allow one more liquidation of equities before the next qe session. You know, spook average Joe bullshitters with their 401(k)s before "having to respond".
sure you did
Yes, I'm sure I did as well.
Just because the people here don't have an understanding of technical analysis or economics doesn't mean that I don't.
And before that I'm sure you lost 95%. So, congrats!
I called the number but no one answered. Did you change it?
Lucy doesn't have to pull the ball away from you, Jory. You'd miss it anyway. What an constructive argument you present.
Oh, and by the way, you have a new zit on your chin that needs squeezing..
Ouch.
Invest in goldschlagger! It's edible and makes your shit worth more than paper money you whipe your ass with!
The fact that I am being junked by the good people of zerohedge - the utlimate contrarian indicator - shows that my calls are most likely right.
I wonder how it feels to be bearish 100% of the time, and miss every rally...
And now, they're betting against the house. I wouldn't bet against Goldman Sachs, who happens to be short gold.
Would you bet against the house in the casino? I sure wouldn't.
Goldbugs do this every time that they buy gold.
If the house was in flames with $60+ trillion in unfunded liabilities, yes.
Karl Answers:
http://market-ticker.denninger.net/archives/2361-Listen-To-The-Hucksters...
Douchinger goes through his same old spiel.
I argued against this shit before one of the times I got banned from TF.
He desires to place his "wealth" in the notes of a bankrupt State, that is his prerogative.
The future is not going to be about credit anymore; it's going to be about the real.
Listen To The Hucksters, Lose Your Ass
I figured Denninger was admitting he was a huckster and that I shouldn't listen to him.
+1 He once wrote that gold bars will be doorstops and paperweights. If he finally goes and buys some that will be a great sell signal, I'll dump mine immediately.
At Los Alamos in 1945, Feynman was giving a tour and noticed a hemisphere of Pu coated with gold and being used as a door stop. So, it has happened at least once in history.
- Ned
So now Denninger is plagiarizing Lenin?!
Great way to bolster your credibility there, Karl old boy.
I don't have time to go through the entirety of his blathering right now but this stood out:
The S&P 500 went from about 125 to 1576 (if you got out at the top) or 1089 (today), a gain of 871%. Of course there was plenty of inflation, but the point remains.
And exactly what point would that be? Inflation of the dollar eliminated any real gains of the S&P so your point is moot, Karl, you fucking goon.
I am Chumbawamba.
And wouldn't inflation negate any gains in gold as well?
Gold's rise has outpaced inflation, so far.
Which is precisely why it is overvalued.
"Of course what really happened was that gold's price collapsed and the promised hyperinflation didn't occur. The hucksters took all the money that the proletariat paid for their gold with (in "worthless" fiat paper, no less!) and laughed all the way to the bank - and their new yachts. The proletariat suffered through 20 years of inflation while their "protection" went down in nominal value - they got buttfucked twice by listening to these clowns!" Karl Denninger
You have to love a guy who doesn't mince words, kinda reminds me of Kevin "walstreetpro2" Rowland (not the message, just the delivery).