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Must Read: Oaktree's Take On Gold - Howard Marks Discusses All That Glitters
The topic of Howard Marks' latest letter is gold. The Oaktree Chairman presents one the better comprehensive pieces on the precious metal, laying out both the pros and cons. Presenting the current broad schizophrenia when debating the value of of gold, Marks, in a comparative allegory to 1952 opinion of Noah "Soggy" Sweat on whiskey, Marks states: "I have no doubt: gold is the ideal investment"...yet..."Gold has no financial value other than that which people accord it, and thus it should have no role in a serious investment program. Of this I’m certain." Arguably one of the better two-sided presentations on gold's true value, we are nonetheless surprised that Marks did not reference the opinion of Dylan Grice (and others before him), who analyzes the price of gold in terms of the global monterey supply, which can be read in its entirety here. Nonetheless, as Marks is always one of the most thoughtful observers on markets, this piece is a must read for everyone.
All that glitters (pdf)
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I was pissed in munich station and i got it into my head the shop lady had ripped me off so i started grumbling swear words at her thinking 'she's a 60 yr old german grandma - she won't know these profanities...'
and clear as day she said 'don't call me an old bitch -Fuck you, cocksucker'
she said clear as day - and i ran
goddam german grandma's - they are truly evil , just like the ponzi
Now that's funny! " I ran" -great response!
Pussy.. Lucky she didn't chase ya... ha
blah blah blah...all this is great except..who the fuck in Amerika has the first clue about gold today? Us here on this board? Who the fuck holds any sizable amount of gold? hint: hes bald and doing gods work. You think Joe 6 pack fixing your plumbing gives a rats ass about the price of gold today or has any except his bloated wife's pawn shop wedding ring? Think this through logically,not through your golden goggles. Seems like gold is good maybe ten years after a crash..but during high inflation? If you need to get liquid..say get buy a 12 pack at the store..what are you gonna do trade your metal for inflated currency? Your always at the mercy of the currency used for everyday shit..you always have to trade your metal in for paper for everyday transactions..not enough people have metal to make it viable for everyday transactions. Also lets say I trade an ounce of silver for a loaf of bread...the currency continues depreciating, silver goes "up"...so how much did I pay for the bread? The price of silver that day or the price a week later when solver doubles in "price"? Wealth has been mistaken for the unit of exchange..wealth is food,water,shelter. Your all mistaking the menu for the meal..you chew on the menu Ill take the meal..if I have to kill for food then violence becomes currency I guess.
so I'll have a bunch of toilet paper too?
Idiot, according to your cohort, there are zimbabweans who care nothing about gold mining it in order to trade it for shit.
The fat plumber and all the rest would find out when they have to go pawn their silverware or that wife's ring. People in argentina were breaking off gold necklace links and taking them to the god's work baldies in Buenos.
Even TODAY, yes, you can actually take fucking gold to a pawn shop and get cash for it! Holy fuck! In a hyperinflationary world, these businesses will STILL EXIST.
So every single Zimbabwean mines gold? There is nothing else they trade? Every single swinging dick in this country are gonna be going out to the pawn shop to trade their gold trinkets for worthless fiat to go pay for bread at the grocery store? If there is any bread at the store during a hyperinflation? Well at least the pawn shop will be open and I can get a truck load of FRN to get the last Ipad at Wal-Mart..I was under the impression the it would be oh I dunno...fucking chaos.
333 million cattle are gonna all be trading gold fucking teeth and grandmas good silver ware for a 12 pack of bud and few brats for the grill? The Jersey Shore douche bags will make out well I guess.
Shit this hyper inflation shit sounds fun! Its like tail gating at a swap meet!
every hyperinflation is not like Weimar, which took YEARS to unfold.
It wasn't as if bread just vanished one day
As far as the iPads, I'll already have looted those bitchez. That is my ace in the hole for hyperinflation, that and Spam, moonshine, and opium.
Im stocking up on Brazilian hookers, twinkies , the 5th season of Dexter and a big fucking gun.
"Brazilian hookers" Address please..
repost
Thats because bad money drives out good.
A strong neighboring currency has been a refuge in past monetary disasters. Are you sure one will exist when the US dollar falls from grace? Reminbi? Where will you get them? Are you sure they'll retain purchasing power in the face of a dollar crash? Since energy is what makes this modern world go round, which currency will the producers of energy accept for their economic life-blood?
Have you ever stopped to wonder why a sale of coal by Australia to China is denominated in US dollars instead of Australian dollars or Reminbi?
There is a reason for it...and understanding just what that reason is has great bearing on your assumption that there will be a "strong" currency to go to when the dollar collapses.
I'm not convinced one will exist. For awhile anyway...
Finally, someone who understands.
Yes, I agree, no neighboring currency will do the job. But does this mean people will start using gold? Maybe. Maybe not. It's crowd psychology. You never know.
But one thing is certain: if the crowd really starts using gold, those who have gold now will become the new rich. If the crowd doesn't, they will fare better than those who hold cash, but not better than those who own canned food.
Ok. Say you stockpile $100K of canned food. Thats A LOT of food. What if you need to save $1 mil or $10 mil? You will have to turn elsewhere to find your savings vehicle. Hint hint some coins and bars might work.
..
It's difficult to parse a complex topic in a few posts on a message board...but in general I also refuse to predict whether or not gold will ever move through the economy as a freely circulating currency again. I don't know if it will or won't...
But, I am convinced there is no more historically reliable store of value out there.
I also understand your point about current gold holders becoming the "new rich" in such a scenario...and looking at who owns the vast majority of it, it appears to me the "new rich" will simply be the "old rich" riding a new horse. Scares the snot out of me, frankly.
This thing will come in waves, and I also agree that it's very likely we'll see a period where a can of food might purchase much gold...which is what I'm planning for.
That part of the "wave" is for accumulating gold and silver, not surviving on it. Trying to survive on gold and silver during the darkest part of the night will probably meet with some success...you'll preserve your life...but people like me will have the metal (capital) to invest in productive enterprise once circumstances stabilize (and they will...eventually.)
based on WHAT, your longitudinal study of the paper price of gold vs canned food in hyperinflating States?
Gold, canned food, heroin, all the same...
Canned food has a shelf-life and I'd assume heroin does too. While canned food has a very high marginal utility, heroin has a much smaller pool of buyers.
Gold is hardly "the same"...
As to your "based on WHAT.." I'm not certain what you're wanting the "basis" for. If you're referring to my assertion that we may see a time when a can of food will purchase a great deal of gold...that's not based on anything near as sophisticated sounding as a "longitudinal study"...whatever that might be.
That's simply based on the logical assumption that if you're starving you'll give me a lot of gold (if you have any) if I am willing to alleviate your hunger in exchange for gold.
Pretty simple really....
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Trav777 wasn't replying to you. Replying to Ponzi.
Well...that explains my confusion :)....my bad....
OK Ponzi, you convinced me, "gold is not money."
SIlver is though.
Ponzi, the gold standard in Germany was dropped prior to WW1 1914.
The lost war was an important reason for hyperinflation.
Actually, Germany contracted an enormous debt during WWI, assuming their defeated enemies would pay it. It's only when the war ended that they began to print. At least, that's the version of Parsson.
In Argentina and Yugoslavia they could use the reserve currency of the world ($). If hyperinflation happens to the USD, where do we go? I bet gold.
the article is pavlovs dog ,, lurching over a bowl of gruel
Existence/life and Intelligence are what I value. Anything that increases either of these is valuable, in my estimation.
Add LOVE to your short list. I am with you on those values. Oh, "honesty" is a good add on too
If this guy were my financial advisor I would fire him.
Why should anyone be paid to tell clients that the past 5,000 yrs of gold/silver acting as money was an aberation.
Why should anyone listen to a person that claims that all is well in fiat money land and that gold has no place in a portfolio?
This author is yet another example of the gov sending Benny deciples out to cast doubt on the only currency (gold/silver) that have proven successful over a very long span of time.
'Must Read'??? I think not.
but learning from history is so old fashioned.....
and just too darn easy...some folks insist on doin their learnin the hard way!
I agree his premise is built on sand he never maintains in my view a coherent set of logical points. I was thinking fifth column halfway through bennies minion by 3/4...
Kitco's nadler on gold and silver
http://watch.bnn.ca/#clip386523
and other good commentaries
http://www.kitco.com/ind/index_date.html
nadler is a punk when it comes to gold and silver
richard russell thinks nadlers brain is mush on gold
oh yeah? I challenge you to a dual at Kitco's office on Tuesday at 1:00PM? I don't have silver bullets though, i melted them and sent them to Blythe to help cover her shorts
Nadler is a moron...his idiot advice will cost you big bucks...
Never argue w the/a Hulk- so to simply comment-- Nadler is talking Kitco's book IMHO. For the record, he does (pro forma) say that people should have 10% of their assets in gold, but I think the key is that Kitco does better business w a lower price, one that rises steadily but gradually.
Never argue w the/a Hulk- so to simply comment-- Nadler is talking Kitco's book IMHO. For the record, he does (pro forma) say that people should have 10% of their assets in gold, but I think the key is that Kitco does better business w a lower price, one that rises steadily but gradually.
By equating "Nadler" and "good" in the same sentence, you have just contradicted yourself.
A more laughable, discredited, disingenuous, lying, arrogant, clueless snake of a pro-establishment propagandist than Jon Nadler could probably not be found, and does not likely exist.
A more laughable, discredited, disingenuous, lying, arrogant, clueless snake of a pro-establishment propagandist than Jon Nadler could probably not be found, and does not likely exist.
Oh yeah, how about Robot?
By the way, if you watch the video, you see me saying "I don't put much faith in the gold/silver ratio" I mean come on, what's 5000 years of history worth. We re-invented the laws of economics and markets and, and you know...it's different this time...yeah
Hey, idiot, who gave you permission to post my writings? are you trying to embarrass me?
well, Johnny, if your own writings embarass you, what can we say? Wait! if you were even capable of embarassment..... well there might be hope. But, I think not....
I think the banks will be seriously considering gold holdings, since there is probably a currency devaluation in the offing in Asia.
So if you can't eat gold, and the gold price rises, do they eat their hat?
oK, I own it and I'm not a dollar bug, but gold manics are basically playing into the governments hands. They control the last ditch representation of "money" and barter storage.
But, historically like the 30s, if the USA doesn't go tits up owning GOLDMINERS is a better play. Speciifcally small producers like Century Mining or gold reservists like Clifton Star. Larger players like Kinross will move upwards consistently.
Like I said, if we go tits up, equity ownership will be valueless. Good luck getting your stock certs from Fidelity...
oK, I own it and I'm not a dollar bug, but gold manics are basically playing into the governments hands. They control the last ditch representation of "money" and barter storage.
But, historically like the 30s, if the USA doesn't go tits up owning GOLDMINERS is a better play. Speciifcally small producers like Century Mining or gold reservists like Clifton Star. Larger players like Kinross will move upwards consistently.
Like I said, if we go tits up, equity ownership will be valueless. Good luck getting your stock certs from Fidelity...
gold has no value except what people assign it
and god makes little green apples..
the reason that for 39 years you did not think of gold as an investment idea,, is because the whole economic area was cluttered with Keynesian's crap.
so look out at the landscape and see what these ideas have wrought ,, pretty impressive .. lol
Gold has no real value.
Silver has no real value.
Oil has no real value.
Why? Because ALL of them only have value because people want them. In fact, all this bullshit about how rhodium or platinum or iron have industrial purposes...wtf is that worth? They only have a purpose because people want the things made out of them.
If everyone, en masse, decided tomorrow that they didn't want plastics or petrochemicals or gasoline, oil would be valueless. If they decided they didn't want paved roads or structures, concrete would be valueless. If everyone decided to commit fucking suicide, EVERYTHING except CYANIDE would be valueless.
In other words, what I'm getting at is who gives a fucking shit if some moron thinks that the lack of a major "industrial purpose" is the sine qua non of value? Because industrial purposes themselves ONLY HAVE VALUE because people want the results of them.
Gold has been valued by people for whatever reason, probably because it is rare, dense, shiny, and yellow. I've noticed that women seem to like shiny things so much that there is this entire industry built around relatively useless allotropes of carbon. I plan to stick a chunk of pencil lead in a setting and claim it's the same shit the next time I get engaged. I'll let you know how it goes. I'm sure my rational explanation that it's all just carbon will thoroughly win the day.
Absolutely true, plus there ain't no gold in Ft. Knox- the last time a president visited the facility was over 50 years ago! Dang, that's the FIRST place i'd go if I was elected.
i trust 5000 years of history. Silver and gold is for those who have savings. The common man has lived hand to mouth , paycheck to paycheck for centuries. He has no need of gold .as us common men value ourselves by our deeds.
You are stone-cold correct on your demand value comment. A lot of people seem to be stuck on using the term "intrinsic value" as an organic basis for some underlying value. This is bullshit. What would the intrinsic value of gold be next week if scientific evidence proved it caused cancer? a hell of a lot less than it is now...even if the evidence was false, all that needs to happen is for people to believe it. So, like any commodity or stock or bond or widget, the way to make money off of it is to predict changes in demand.
http://www.bloomberg.com/news/2010-12-20/soros-gold-bubble-at-1-375-has-...
Itz long as all fuck but a good read.
"(X) has no real value. Why? Because ALL of them only have value because people want them."
"If everyone decided to commit fucking suicide, EVERYTHING except CYANIDE would be valueless."
"I plan to stick a chunk of pencil lead in a setting and claim it's the same shit the next time I get engaged. I'll let you know how it goes. I'm sure my rational explanation that it's all just carbon will thoroughly win the day."
I've been reading these stories and blogs religously for 4 months now, alot of you ZHers have made me laugh, but this one... I'm still laughing.
You are forgetting:
Guns, knives, razor blades, sleeping pills, jumping off bridges, nooses, carbon monoxide, intentional car wrecks, alcohol/pills, depression and heartbreak. It seems you are forgetting a lot of things.
STFU H8R
I will provide the service to you.
Yes but in a mass suicidal populous cyanide will garner a premium and will rise to the top as the most efficient store of health.
suicide flash mob circular firing squads. Think about it.... call 983-5764
This is the modern age, show some creativity in your demise.
perhaps get togethers at Mc Donalds with fat paddies and oil absorbing fries will do it, but its sure slow.
At the rate we are progressing it will take us another 6 years to wipe out humanity
What say we pick up the pace you laggards? Can we just walk into oncoming traffic, please?
If your body is slowing you down, by gosh leave it somewhere!
I have disagreed with you in the past, but that there .. That's damn funny, and damn true. Nice job.
Good that Tyler presents a contrary opinion.
Gold has had a massive 10-year run.
It can't run forever......
One day it is going to crack. But so far, the technical picture is still strong.
Robo, I think what dumpster was trying to say is instead of looking at it as a 10 year massive gold run, it might be looked at as a 10 year mega dollar drop. And when the dollar cracks, well, ooh boy....
By his same logic since the USD has steadily lost value for almost 100 years now is the time it will rise in value again...really
It isn't going to crack during fiat's race to worthlessness and Nation's race to default...
i can see the crack from here. aw crap my island is tipping.
So you are on Guam?
http://www.youtube.com/watch?v=zNZczIgVXjg
We only elect the best Dummies. I dont think he was just feeling a little tipsey, his brain has a permanent misalignment
you flat-out are incapable of understanding peak supply conditions, aren't you?
gold's "bull run" was caused by production declines following a 2001 peak. If you like its technical picture, take a look at helium, which peaked in 02.
Stick to your short term trades and STFU about the rest of stuff.
you meany you!! wahh
funny,
As this is a depression, see depressions of 30s, south sea bubble,tulip bubble, 1890s etc. The senior currency and gold can have a good run simultaneously. This could last for decades since the dollar is integrated in all systems. Trading, software, margin etc. Unwinding the dollar out of senior currency status will be a nightmare and Bernanke is taking advantage of that for now. The British pound was in a similar situation previous to world war 1.
Anyone expecting the dollar to go away is in for a world of hurt.
And people who think gold is in a bubble compared to paper is also in for it. Thats how it has worked from Rome until 2008 when government goes haywire in money supply inflation.
Calling Mr. paul Volker...
Good that RobotTrader presents a contrary opinion.
Overhyped equities and government debt have had a massive 30-year run.
It can't run forever......
One day it is going to crack. But so far, the technical picture is still strong.
It won't crack until it has its last manic parabolic run-up, in response to the ongoing fiscal irresponsibility of pretty much every government on the planet.
When friends and acquaintances who aren't regularly active in the market start telling you about which hot new junior exploration stocks you should be buying, then its time to get out.
you tell'em Robot, you tell'em the thing is going to crack soon very soon, it could be Monday for all we know
The idiot squeeks; all heed. If you don't have a prediction so we can laugh at you when it fails; then STFU, thank you.
The idiot squeeks; all heed. If you don't have a prediction so we can laugh at you when it fails; then STFU, thank you.
The USD is going to crack before gold does Robot. Then what happens to all your charting and general bullshit as it relates to gold?
It may well crack when everyone who can afford to own it owns it (and some who cant) and there is nobody left to sell it to.
That is like saying dollars are worthless to poor people.
I say the same thing about bonds and the stock market.
must read .. hardly more fodder from investment guys .. not know his ass from a whole in the ground
and zero gold ,, so he missed a pretty good run .. in fact beat them allover the last ten years
so this guy is on his toes lol
Give me cash flows and I can value it...on gold there is no analytical way to value it" - how about the PV of expected future debasement. Has all the certainty that those "expected" future cash flows do not and as the good author says has worked for hundreds of years. This entire piece is riddled with illogic. The entire piece should have been one line with credit to JPM: Gold is money (not the other way around)
well for now silver and gold make good baskets of value .
ill bet most who don't get the reason for gold .. missed the silver run from 4 to 30 gold from 300 to 1400.
and will miss the run higher
Sinclair an insider, family started the big investment houses of new york.. and we have a couple chart guys who couldn't Tell the difference from Austrian gold to Keynesian garbage.
learn from the experts .. or spout to the kids on the TA row,,
There are terrorists out there, that's why we have wholebody scanner. Gold/Silver is fiat x-ray machines so fiat issuers really hate Gold/Silver
...Gold is a lot like religion...
Where is trust to be placed? Does the gold in the temple give it value, or does the temple give gold value? (Paraphrased)
Paradoxically, trust is a learned response that is easily thwarted when lies are acted on as fact and the resultant injustice embitters a person to action, usually in a negative and destructive fashion.
For this reason, the "temple" is far more important as an arbiter of truth and gold accompanies, rather than leads.
"Get wisdom and don't sell it, it's worth more than gold, pays better than silver and nothing desired compares to it."(paraphrased)
But I'm so much better at being simple! (and stupid!)
Gold is like a 5000 year old temple, Dollars are like 100 year old one.
When it was Mad Max time in Kosovo, ammunition was money. Those forced to wander the land paid for neccesities with ammunition.
Just think how much a drone would be worth, or RPG, but ammunition is an easier carry when you have to be mobile, or is it?
Now I don't know, but I been told it's hard to run with the weight of gold. Other hand I have heard it said, it's just as hard with the weight of lead. ...
hunter/garcia (new speedway boogie)
And it confirms what I previously said about gold. Just because gold is the best currency one can use does not mean this one will use gold.
Idiot.
Either you argue, either you're junked like the troll you are.
Ponzi,
I think you raised some good points - not sure why so much hostility is directed at you. I think a lot of people feel so strongly about their philosphic stance on gold and fiat money that they can't even act civil to someone raising valid points.
I have wondered the same things as you have about the widespread acceptance of gold as the dollar drops. Even now, most everyone my wife and I know look at us like we are nuts when we casually inform them that we are heavily, heavily into gold/silver. 99.9% of the population not only doesnt know shit about gold, or what fiat money means, but they seem to have no real inclination to learn about it. They just dont care and are lighyears away from even a basic working knowledge of how/where to buy and sell bullion and coins. To get an entire population so woefully uninterested in gold to switch their mental gears and adopt it widespread - and then even "demand it" - is a tall order at our current stage.
I think we would need a long slow decline, not a fast one, to usher in widespread gold adoption. People need time to be exposed to it on a daily basis from TV and the newspapers ( and not just sleazy TV commericals from overpriced shady hucksters) then ponder it, mull it over, witness their friends geting into it, making gains from it etc. THEN they may dip their toes into it and then eventually pile en masse for fear of being left behind (witness the tech stock craze). So you'd have to reach a critical mass when suddenly "everyone knows that gold is the place to be" before it gains mass traction. A sudden collpase of currencies would never give people enough time to adapt since its so far from their paradigms (unlike in the past when it was recent history, as you mentioned)
My bigger fear though is not that people wont eventually accept gold, but that capital controls, onerous taxation, and confescation would be mandated if things got bad enough, to try and force the dollar up and to punish evil elites and "traitors" to the dollar. God only knows what insanity the government would try to enact to keep the whole system from flying apart. People argue that "this time it's different" and in our modern system it would be impossible to clamp down on gold. I think the opposite is true - they can now easily track you much more thoroughly than in the 30's. So by refusing to let people buy and sell gold freely they could force faster and more widespread adoption and acceptance of their new bullshit fiat Amero or IMFnote or whatever they are pushing.
Well, you've summed up my thoughts.
I think I'm even more pessimistic than you on the future. I don't like conspiracy crap, but there are consistent facts that cannot be ignored. Since approximately 150 years, everything, over the long run, drives to the same direction: more socialism, more globalization, more centralization of power in a few hands, more control of the population.
I don't know if the ruling oligarchy wished the crisis or not. But I think they were prepared to it. And I think they will use it to support their agenda.
America in 2020 will be unrecognizable, that I can guarantee. But in a good way, or a bad way? The bad way seems the more likely.
We will have to fight for our freedom. And maybe creating a new Nation, from scratch.
"America in 2020 will be unrecognizable, that I can guarantee."
if true, it seems like 2020 already ... to me
Your observations hold much merit. I concur, regarding the state of this nation a decade or so hence. We may also use another example to illustrate what media of exchange will be of value during times of crisis and complete societal breakdown; a contemporary example, much closer to home: New Orleans, post-Katrina. The police themselves, in certain wards, simply deserted. Of what use was a gold Buffalo or a Maple Leaf, during such a period of chaos? Firearms for self-protection ( those not confiscated ), food, drinking water, fuel -- eeriely similar to the "Mad Max" fictional scenario -- were of material value. Granted, the disorder was temporary, but extrapolate this pandemonium out several years, on a national scale. Make no mistake -- such a condition would likely not be "Thunderdome" permanent, and when the smoke cleared, those who possess gold will emerge the "new" nouveau riche; during the tempest, however, gold would be a bit further down on the "necessities" list. It is always prudent, however, to hold a portion of one's assets in portable fine gold. Just hold a SIG Sauer P220 and some ball as well, frankly.
Thats because bad money drives out the good.
wrong. People used DMs.
Those with gold traded it for DMs or left the region.
Nobody of significance was caught in Serbia during the war; they all GTFOd. Commoners used ammo, cigarettes, TP; there's a whole blog on what was valuable in the meltdown.
Clothespins are good, toilet paper, perfume and makeup. Some of you drag queens on here just may be the new oligarchs.
Meet your new overlord...
http://www.thelmagazine.com/images/blogimages/2009/08/25/1251209856-giul...
The only reason Gold is up is More buyers than Sellers.
Ponder this, on Armegeddon +1, are you gonna come to me and even think for a second that I will give you $5,000-10,000 cash USD green paper for an ounce of gold? Ha ha, at that point, what do I need gold for? Go see if Starbuxx will take it.
And then after things settle down and start getting back to normal, gold will be money again (USDs might not be). Its a convenient store of value, that's why its played that role pretty much since people started trading stuff with each other.
"And then after things settle down and start getting back to normal, gold will be money again"
Or not.
"Its a convenient store of value, that's why its played that role pretty much since people started trading stuff with each other."
There are historical trends which don't last eternally, because they depend on a very recently changed factor. Nothing tells you Americans will start to use gold for their daily transactions in the 2013-collapsed America. I don't visualize the average American mom paying her bread with gold. Maybe you do, but I don't.
Perhaps your ability to visualize is limited or impaired.
Ok, so you think the average American mom will at least once in her lifetime pay her bread with a gold coin.
I take the bets right now. I bet one ounce of gold with you it won't happen. I will still be on ZH when the shit hits the fan, and still commenting. So you will be able to find me. I swear.
I don't know.
But the much more salient point would be, will the average American mom ever have the FREEDOM to at least once in her life pay for her bread with a gold coin, if she so chooses? We do not have that freedom today --- and you should ask yourself why we do not have it, and just who benefits from that lack of freedom.
+1
Of course they won't buy bread with gold they will buy it with nickle, copper or silver or a paper bank receipt saying they have such in their holdings available for exchange.
You may not buy your Bread with a gold coin,
but then you can own a bread shop for few ounces of gold coin and make/sell your own breads.
More likely when TSHTF you will be lying in your living room with a few bullet holes in you and your house will be ransacked...all this talk of the internet and Starbucks still operating normally is fucking laughable.
Not to mention that the average American will not have any gold.....the average American has no gold now..where does all this gold come from the we average people are supposed to use for trade? Seems more likely the gubmint will just make a new fiat currency..poof!..just like that.
I think it all depends on how angry the proles become.
Goldline ... doncha' know?
I'll be paying Worker Bees in junk silver...
Another fallacious argument. When people don't have paper fiat what do you do to get some? They work, or whore themselves out, or dig a ditch or beg or steal. That is what is coming for most of the people that have PhDs in economics and Aramaic Dialectic Intracacies.
Although a sense of justice would be served to find these highly educated liars digging ditches for their next meal I rather think they would soon find gainful employment utilizing their primary skillset; whoring themselves out as liars and ministers of propaganda to the same elitest masters they serve today.
I see your point and understand your contention that gold may be of no use during the "crisis" I do not think gold will last if ever accepted for daily transactions but as a transitional tool to hold wealth and move into the new paradigm as whole as possible it is certainly a basic block.
The history of mankind and it intrinsic valuation of gold will not stop. Just ask your butcher or your handyman a simple question; Is gold valuable? He may not know the price but he will emphatically answer yes. That situation will not change post dollar, it will strengthen.
And, what will Starbuxx be taking on Armageddon +1 prey tell?
Roasted coffee beans?
hell no bitch, I'll be too busy lootin
I always like the "I'll just shoot you for it" argument. That is some plan b.
Damn I thought that was plan A
"Gold has no financial value other than that which people accord it, and thus it should have no role in a serious investment program. Of this I’m certain."
Must read article??? You've got to be kidding. Gold's intrinsic value is based upon international monetary reserves and most certainly has a place in serious investment programs at this stage of the monetary cycle. Of this I'm certain!
http://www.gata.org/files/PeterMillarGoldNoteMay06.pdf
it's just propaganda by a person damaged by their recent losses in conventional investments and completely unable to think outside the box.
I would recommend "A Pocketbook of Gold" as reading material for Howard Marks, since he now has to think about Gold.
http://apocketbookofgold.com/
Great speech about whisky, but there seems to be error in Howard Marks' presentation of it - Apparently the eloquent Noah S. "Soggy" Sweat, Jr. (1923-1996) was a member of the Mississippi legislature, not that of Texas.
The speech is so good, it seems it has been re-written a number of times to fit into different states, settings, and topics. Here is the apparent original text, a web page sourcing the Clarion Ledger of Jackson Mississippi, as giving Soggy Sweat's original words of 4 April 1952:
"My friends,
"I had not intended to discuss this controversial subject at this particular time. However, I want you to know that I do not shun controversy. On the contrary, I will take a stand on any issue at any time, regardless of how fraught with controversy it might be. You have asked me how I feel about whiskey. All right, here is how I feel about whiskey.
"If when you say whiskey you mean the devil's brew, the poison scourge, the bloody monster, that defiles innocence, dethrones reason, destroys the home, creates misery and poverty, yea, literally takes the bread from the mouths of little children; if you mean the evil drink that topples the Christian man and woman from the pinnacle of righteous, gracious living into the bottomless pit of degradation, and despair, and shame and helplessness, and hopelessness, then certainly I am against it.
"But;
"If when you say whiskey you mean the oil of conversation, the philosophic wine, the ale that is consumed when good fellows get together, that puts a song in their hearts and laughter on their lips, and the warm glow of contentment in their eyes; if you mean Christmas cheer; if you mean the stimulating drink that puts the spring in the old gentleman's step on a frosty, crispy morning; if you mean the drink which enables a man to magnify his joy, and his happiness, and to forget, if only for a little while, life's great tragedies, and heartaches, and sorrows; if you mean that drink, the sale of which pours into our treasuries untold millions of dollars, which are used to provide tender care for our little crippled children, our blind, our deaf, our dumb, our pitiful aged and infirm; to build highways and hospitals and schools, then certainly I am for it.
"This is my stand. I will not retreat from it. I will not compromise."
A great article indeed but at one point it raised a question, near the end, where the author states:
I know Von Mises adepts are denying such limits, because in their view prices of products will fall with more efficiency of production, but I have a different take on the matter.
As people like Mish i.a. are predicting, in coming decades the western economies will see hardly any growth. A bleak future of dips into deflationary recessions alternating with periods of meagre growth are what we should expect to see. Restricting factors being too much debt, international wage arbitration, aging populations and possibly, the impacts of energy dearth and climate change combined.
Under these circumstances, some form of a gold standard, might be a boon, a stabilizing force in an otherwise drifting world, or regional economy, and in no way a limit to growth, but rather an anchor to mitigate decline.
It is strongly encouraged that the linked Dylan Grice piece is read in conjunction
........... Gulp.
......."..Tuesday, December 14, 2010 - Kid Dynamite's World - Financial markets rants and other interesting enunciations
So You Want To Understand S&P Futures Basis Trades (aka, Index Arb)?
I swear - there's nothing I'd rather do less than spend my time being the re-educator for all the incorrect crap that ZeroHedge spews into the Interwebs, but when a blog as widely read as they are publishes such utter and complete nonsense, threatening to miseducate masses of readers, well, I can't help myself. So let's turn it into another educational lesson, right in my wheelhouse: today's topic is the "backwardation" in the S&P 500 futures. Backwardation, although a term I've never heard applied to S&P futures before (that's a commodities futures markets term), means that the longer dated futures contracts are trading at a discount to the near contracts. In other words, the price to buy the June 2011 S&P 500 future (herein referred to as the ESM1) is lower than the price to buy the December 2010 S&P 500 future (herein referred to as the ESZ0). This is a function of two things: interest rates, and dividends, but not at all an indication of future supply and demand for stocks. In the index arbitrage world, we want to know how the futures are trading versus their "fair value." The fair value of the futures vs. the cash index (underlying stock basket) is the difference in cash flows between holding one or the other. The inputs are the "carry effect," derived from interest rates, the index level, and time to maturity, and the "dividend effect," derived from the dividends that the companies in the index will pay between now and the expiration date on the futures. When you buy the ESM1 - the June 2011 S&P 500 future, you don't actually have to pay for the full notional value of the future. You post margin. Since you don't actually own the underlying stocks, you don't receive the dividends on them. On the other hand, you earn "carry," because you can invest the money that you would have otherwise spent buying all the underlying stocks. We can write a very simple equation to tell us what the equality would be if everything were trading at "fair value" and there was no arbitrage opportunity: (ESM1) + carry = (SPX) + dividends......"I believe the referenced blog spent about 12 hours creating a post denying the JPM silver shorting scheme 2 days before the firm confirmed (through sources) it had unwound said position (followed up by the same amusing hyperbolic response he constantly accuses ZH of using). We wish him well. We also always welcome KD's ceaseless commentary on ZH. After all it is the morbid fascination of people such as him that have made ZH among the most read financial blogs.
Hey Tyler,
sometimes it's best to just admit that you didn't know what you were talkign about, like with the ES futures "contango" nonsense post. It was unargubably, 100% wrong. It destroys your credibility when you try to defend it. It also necessitates people like me who actually understand that you are wrong writing correction posts. Unfortunately, a million people read your post and get the wrong story, and only a few thousand read my post and get the truth. If that makes you feel good, well, you have a different goal than I do- mine is to educate and inform readers with accurate information.
As for the "confirmation" of the JP Morgan silver short - you're obviously talking about the FT story, which had only one piece of information from a real source - a "no comment" from JP Morgan. So, when a trader on the COMEX reads Zero Hedge, tells the FT that JPM reduced their short, and then ZH completes the positive feedback loop with the 100% false headline "JP Morgan admits to, reduces massive silver short," well, I hope you feel good about lying to millions of readers again. Note, that headline you wrote is false - it's not debatable, it's simply wrong. but I already wrote about that:
http://fridayinvegas.blogspot.com/2010/12/internet-is-like-game-of-telep...
ps - thanks for the well wishes. I would hope that you would use your massive internet podium in an effort to spread facts, not sensationalism, in the new year.
Today we are going to watch the most anticipated match in professional wrestling for the heavyweight championship of the world.
Are you ready ...... ?
Wrestling fans, are you reeeeeeeeeeeeeeeeeeeeeeeeeeeeady ...
For the thousands in attendance and the millions watching around the world. From the financial city in London, England.
Lets get ready to rumble ........!!!
Maybe nobody reads your blog because you're a douchebag...
why, does KidDynamite delete comments he finds difficult to answer?
Howdy folks, my chrome browser is hijacked tonight, Google.com is a 404 error, and the Jose Cuervo site just sent me to the Century Council.org to fight drunk driving. I don't even own a car! I think the internet might be cracking up.
Anyway, I wanted to post Silver & Gold, Jose Cuervo style. Think about it. If you can.
I'm sorry, this is just a ridiculous statement: Well, that’s exactly the way I think it is with gold. Either you ’re a believer or you ’re not.
Whoever this guy is, he simply hasn't yet given this enough thought, and it shows. Which is more irrational: accepting as valuable something that can be produced effortlessly in unlimited quantities, and which therefore requires men with guns to enforce its value and acceptability; or, accepting as valuable something that humans have accepted as valuable for thousands of years, and still do?
Wow, I just read the next few paragraphs and found this revealing winner: But there’s no analytical way, in my opinion, to value an asset that doesn’t produce cash flow . . . and especially one that doesn’t at least have the prospect of doing so.
Trapped in the B School paradigm. I'm not going to bother reading the rest of this waste of space.
"But there’s no analytical way, in my opinion, to value an asset that doesn’t produce cash flow" - he feels the same away about certain family members
Tyler,
Where did you dig this old codger up? He's a pompous ass who hasn't done his homework. Financial "Advisors" like him are the reason "the herd" gets fleeced. The best thing he did was come out neutral on gold. Gee thanks "Howard". Try looking up the work of your fellow Englishman Adrian Douglas who actually is capable of valuing Gold. Forsooth Howard, drink more coffee and clear out the cobwebs man.
you have to understand that anyone in this environment without some gold exposure, is truly clueless.
What is interesting, is there is a vast swath of American society that still has lots of money and NO gold exposure. to me these are the true sheeple.
if Rickards and Sinclair are wrong, so be it; I'm just betting they are right
don't forget the gem of a book, "Gold Wars" by Ferdinand Lips ( may that brave man rest in peace)!
my thoughts are that food and gold are inseparable; food to make it to another day and gold to have some store of value on that day
so some (most) here don't much care for Marks or nadler -- how about Bob Chapman?
Before the 2008 financial crisis, the efforts of the FED was to reflate the economy. The crisis came as a hipcup and the FED responded with more reflation. So the economy should resume the previous trend: up.
The Whiskey story makes the day. You gotta admit Texas has the greatest BS in the world.
Agree with article. Gold has value only because everyone agrees it does. No intrinsic value.
Disagree with article. Fiat money does have value. If you don't pay your taxes with the bankster issued fiat dollars, then men with guns come to hunt you down. So, you need the fiat if you are to enjoy your "freedom" you worthless debt slaves!
Just because that's the way things are doesn't mean they should be!
"Either you ’re a believer or you ’re not."
Agreed.
hey dont blame CNBS and bloom or cash for gold - they have to pay their bills...someone has to help fools separate from their money...but again, I AM A BELIEVER!
When contemplating which store of value to use it is also wise to consider what is the value you wish to store. As oil consumption declines, so will wealth creation. Thus we can expect there to be much less value to store in the future. If you have the option, it might be wiser to store the actual wealth you need/desire (like productive land) rather than a proxy for it (like gold).
point... but what about snowboarding holidays
The author is a moron and admits he never knew anything about Gold for 39 years. A person born as long ago as Antiquity could have put his wealth in Gold and would still have real wealth to show, anyother savings method or investment collapses with the changes through time. Here is a good example of Gold being used before the use of cotton fiber and electrons as money. .... http://www.livius.org/w/weights/weights.html#Money
Yeah, but if he put it in bonds he'd have a 1000 times more money than what the gold could be converted today.
Gold is a trade in times of uncertainty.
There were No bonds to invest in, no nation that existed then exists today . Gold endures.
"Soggy" Sweats is a politician for crying out loud.
"If when you say whiskey you mean the devil's brew, blah.. blah.. blah.. then certainly I am against it.
"But;
"If when you say whiskey you mean the oil of conversation, blah..blah..blah.. then certainly I am for it.
"This is my stand. I will not retreat from it. I will not compromise."
And this starts a discussion on GOLD....."Soggy" says
If you think Gold has value then certainly buy it......
But
if you think Gold has no value then certainly don't buy it....
Buggered my Sunday morning.
"Honey did you remember to pick up some Gold" - Thanks WB7 for the sanity.
Lets cut to the chase here..Why do you think the Russians and Chinese just dropped the dollar in bi-lateral trade and are buying gold and silver up the ying yang..anyone stupid enough to not understand just this simple point and its ramifications deserves to get wiped out with the coming inflation or hyperinflation or depression or stagflation..you knuckleheads keep relying on th fiats of the world and see where you are in 12 months or 24 months or 36 months time...amazing how people can not interpret these signals...wake up..or get in the bread line......
But, but ZEITGEIST, the technicals are all wrong on PM's and have been since Au@$500, LOL!
Something often forgotten in looking at the last thirty years of price history of gold is that 330 million ounces of Soviet gold reserves were looted and dumped on the world's markets s that empire fell. This depressed the price for nearly twenty five years. In addition, western governments sold 50 million ounces through various mechaisms including direct gold auctions and leases. What happened since 1985 is no predictor of the future.