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No Gold Or Silver Bubble Says Sprott's John Embry
On one hand, one has professional stock bubble top-tickers (of the variety that would benefit from some error-checking)-cum-amateur precious metal pundits claiming that the gold bubble is unmistakable. On the other, there are those who have made hundreds of millions of dollars for their investors actually investing in precious metals, such as in this case Sprott's John Embry, who states that there is no bubble in either gold or silver. "Jim Rogers, who is one of the world's leading authorities on commodities, dealt with the bubble issue recently by recounting an interesting anecdote. While addressing a group of high-end money managers, he inquired as to how many of them held gold or silver in their accounts, and remarkably, 75% replied they had never owned either precious metal. When gold is trading at several multiples of the current price at some point in the future, you can be assured that every single person at a similar gathering would be long and then discussion of a bubble might be legitimate. In my considered, opinion we are many years and thousands of dollars away in price from that debate." Whom does one believe? That's obviously rhetorical. Amusingly, Embry takes a stab at the Financial Times, which he dubs a conduit for the establishment: "The FT has been speaking much less disparagingly about gold recently. The paper consistently denigrated gold and its change in tone might be instructive." Of course, a variety of second-rate media outlets are more than happy to step in and fill the "goldbug" bashing void in the FT's absence.
Full recent thoughts from Embry (pdf):
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No stock bubble either - just lots of free 0% money courtesy of USD truly!
What if the stock market and Dollar fell at the same time?
The biggest "joke trade" is when the the stock market falls and the Dollar rises from what is called a "flight to safety". This is the way it has been for years and years now, what if this nearly fool proof trade started NOT to work anymore?
Very shortly this is exactly what is going to happen. For nearly 10 years while the Dollar and stocks see-sawed back and forth many times in the inverse of each other. In nominal terms stocks are unchanged over the last 10 years but in real terms the purchasing power has declined by 30-40 percent and in terms of Gold the Dow Jones is down roughly 80%!
The next panic will include both the Dollar and stocks simultaneously... and bonds, were the Treasury market to join in the free fall an all out panic will follow leaving only one thing standing. GOLD!
Without a doubt the finances of the United States are out of control, some sort of default is inevitable. Because the U.S. owes it's debts in Dollars they will just print what is needed, the world knows this. The current "inverse" trade of stocks moving higher as the Dollar moves lower and vice versa will begin to change as foreigners exit Dollar equity positions. This will also happen with Treasuries and the Fed will not only need to buy current supply but also the offers from disgruntled foreigners.
It really amazes ... this far down the road to default without the above scenario commencing because it is so crystal clear where it is headed. Imagine anyone with common sense coming to a different conclusion. it is this very phenomenon that precedes panics.
Martin Armstrong and others have concluded hyperinflation but look back at history, equity panics nearly always precede and concur with devaluations. After several weeks or months THEN the stock market begins to rise but NEVER outpaces the drop in the currency. In other words, you NEVER end up with more purchasing power after a devaluation until years later. THIS is why you need to own the miners!
While they may initially get caught up in an equity downdraft they will be amongst the first to move higher sensing the devaluation. In a very real sense the mining companies will become the new "banks" as currencies become backed by metal in some form or ratio. The majors will do extremely well because they are producing "money" but they must replace their reserves because they are being depleted every year. It will be the juniors and in particular the exploration concerns that will make a very few investors incredibly wealthy.
Many explorers are currently undervalued STUPIDLY!
Many are valued at far less than $100 per proven ounce in the ground. Will it take a crashing Dollar or $1,500 Gold to get the market place to revalue these concerns? Maybe a couple of unexpected takeovers by majors? The juniors and explorers NOW offer a better and more undervalued play than Gold did when it was trading under $300 an ounce 8-10 years ago. These microcap concerns (many valued under $50 Million) will explode out of nowhere and "10 baggers" will be laggards!
The funny thing is that these trade so thinly that a $20,000 trade can move these 10% or more with ease... a 100 share trade moving a $20 stock a full point or more because there will be nothing offered. Mining shares will go into hiding in the same manner that physical Gold and Silver will, the mindset will make 1979-1980 look like blue skies.
The "new banks" (the majors) will have to get product from somewhere and they will be competing with hedgies, pensions, individuals and even governments. The old saying "there is no rush like a Gold rush" is very true because it is fueled by BOTH greed AND fear!
Now for the sad part, many of you who bought into the theory that Gold and the miners were undervalued over the years will take this ride and make money (more money). The fly in the ointment is that this panic will go much further than nearly anyone can now envision. Some will make fortunes but the really STUPID and OUTRAGEOUS money will be made by those who ride the LAST PART of the wave. Many many latecomers will make more than many true and hardened "Gold soldiers". This is the nature of the beast, the blow off phase will make Trillionaires and Quadrillionaires in Dollar terms. Billionaires will simply be "pikers".
"What is the exit strategy?"... exiting too soon will cost many, MORE than they had already made. Short and sweet...you have to be in the game while this blow off occurs or you will never forgive yourself!
I guess the mines have never been nationalized in all of human history.
Here's where your theory fails: political risk
Ownership of mining stocks is just another form of paper wealth. And paper wealth is only as valuable as the promise it is based upon. Ask the senior GM bondholders about the value of a promise. The US government is already counting ounces in the ground as "strategic reserves". Do you think they give a hoot who "owns" them? Gold is not as much as an inflation hedge as it is a default hedge, that's why it turned and rallied in fall 2008 when the CRB and the Baltic dry were in a freefall collapse. This is not like the last depression where they changed the rules and the Supreme court ruled against Roosevelt. This time they are using the rulebook for toilet paper. Today it is just as much true of lead as it is of gold; IF YOU DON'T HOLD IT, YOU DON'T OWN IT, PERIOD! Try shaking those shares of Perubar S.A. in the face of a home invader and let me know how that turns out for you.
Buy Australian miners.
How does the 40% profits tax affect them. Isn't this just as good as a 40% nationalization of their mining industry? Govt extorting profits from shareholders?
There isn't a 40% tax; it got whacked, and should the Greens try and force it through the two main parties will kill it. There will be some lesser form of mining tax.
maybe so, maybe not. but i'd hate to have to explain to a successful home invader why i won't tell him where the bullion is. with stocks they can't steal them with a six gun (gotta use that fountain pen).
p.s. why isn't it like the last time where they changed the rules? and even though the supreme court ruled against fdr, the laws were changed and the guy didn't get to keep his gold (didn't go to jail either though). this administration claims to be able to kill citizens by executive order without appeal or hearing of any kind. what won't they do?
"The next panic will include both the Dollar and stocks simultaneously... and bonds, were the Treasury market to join in the free fall an all out panic will follow leaving only one thing standing. GOLD!"
Bahahahaha, someone is gonna eat these words some day (soon).
Heh, like we haven't heard from the likes of you before everyday for the last decade, give it up already.
Meh, I suppose if you stick to your 'bwahahaha, you just wait goldbug...' mantra long enough, eventually you might get some sort of satisfaction, though likely only in the form of some BS-nominal-unadjusted-to-real-wealth sort of way.
"Your laugh has a kind of desperation in it..."
Bonne Chance!
Captain Obvious.
Staying long PM's and plenty of lead.
I didn't junk you because I agree with you. Just make sure there is some copper involved for better ballistics.
Agree with you guys.
Gold is the premier precious metal.
But lead moving at over 900 mph becomes precious too! Ask my daughter...
Au above $10K would be a bubble, until then "It ain't a Bubble when you are first in".
"Au above $10K would be a bubble, until then "It ain't a Bubble when you are first in".
Not necessarily so. If we get a dose of hyperinflation there is no limit to the price of gold in dollars.
Here is an excerpt from John Hussman's latest newsletter...In this paragraph Hussman is describing the Fed/treasury childish approach to forcing MV, money velocity or willingness of businesses and individuals to spend.
"A good example of this "toy block" thinking is the notion of forcing individuals to spend more and save less by increasing people's expectations about inflation (which would drive real interest rates to negative levels). As I noted last week, if one examines economic history, one quickly discovers that just as lower nominal interest rates are associated with lower monetary velocity, negative real interest rates are associated with lower velocity of commodities (hoarding). Look at the price of gold since 1975. When real interest rates have been negative (even simply measured as the 3-month Treasury bill yield minus trailing annual CPI inflation), gold prices have appreciated at a 20.7% annual rate. In contrast, when real interest rates have been positive, gold has appreciated at just 2.1% annually. The tendency toward commodity hoarding is particularly strong when economic conditions are very weak and desirable options for real investment are not available. When real interest rates have been negative and the Purchasing Managers Index has been below 50, the XAU gold index has appreciated at an 85.7% annual rate, compared with a rate of just 0.1% when neither has been true. Despite these tendencies, investors should be aware that the volatility of gold stocks can often be intolerable, so finer methods of analysis are also essential."
This is an excellent article by Mr Hussman and well worth a read.
http://www.hussman.net/wmc/wmc101025.htm
very true; hussman is acutely insightful. and that 85% caught my eye too.
Thanks for the link SW.
Regards
Tyler
One can only hope by this statement that you aren't inferring that the FT is first-rate.
Say it ain't so Tyler, say it ain't so. :>)
O, I don't know... as a mouthpiece of the Establishment I'd say the FT is first rate.
Don't know, don't care. I own phys gold/silver/copper and always will. The peace of mind alone justifies the holdings. Screw FT, WSJ and the rest of the fish wrap. I trust no one until they earn it. It is a very short list.
OK, I laughed. Thanks for the perfect one-liner rejoinder!
Yup, it got me too :)
Similar and feelings I guess.
I trust very few. I will keep my physical gold near me!
Disclosure: I hold physical gold here and overseas!
Gold, gold. The best of the bunch re wealth preservation!
Check out fofoa.blogspot.com for latest insight into GOLD!
Best of luck wealth preservers!
Phys copper??? Where the heck do you keep it, in a barn? I have enough trouble with silver. That shit is heavy and takes up far too much space. Gold is much better simply because it's so much easier to store because of it's size to worth ratio. Silver?
I'm thinking of lining my driveway with those 100oz bars. Once they patina nobody is going to know what they are. Hidden in plain sight!
Buffett said of Gold.
"You could take all the gold that's ever been mined, and it would fill a cube 67 feet in each direction. For what that's worth at current gold prices, you could buy all -- not some -- all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?"
He is right. You would be so much better off with a cube filled with paper stamped with the saying in god we trust. Gold is an alternate currency that does well while there are low interest rates. Raise interest rates to 10% and see how much gold would drop. Oh but never mind because the debt payments the US government would have to make would go up so much the dollar would be worthless which would make gold a better alternate currency. Now I am really confused.
not confusing - one has near unlimited debt obligations the other doesn't.
also, Warren's statement has such a lack of context that it becomes a worthless play on words
a similar statement could have been made in 1930 (similar circumstances to today). and the gold would have won, hands down, over the next five years.
for some (many) gold is always "the" investment. that is an argument that can and has been made and debated.
what is a far likelier (but not to say true) proposition is one along the lines of john hussman's essay quoted above. gold does well (better than stocks or bonds) in the latter part of both inflationary and deflationary cycles, judging from history.
I find it hard to believe that Buffet is really as stupid as this comment might lead one to believe... Although at the rate his investment strategy is collapsing around him, who can say?
From another angle we can also ask Mr. Buffet: "which is more productive? A couple of big, very necessary asset classes, OR A SOLID MONETARY SYSTEM?" Hmmmm...
Judging from the economic carnage that fiat currancies bring to world affairs, I'd say that while that block of gold by itself might not yield "returns" [can't eat it either], but it might prevent the wholesale destruction of the of the global economy...
If Buffett was a Gold Cultist... he'd be retired in a nice Trailer Park. And VERY smug about not being cheated in the Big Bad World, baby.
Gold , to me, is a safe haven that's it. The safer the better in today's world. If economic and social conditions return to some sort of sanity then gold might be worth taking whatever profit can be made. I don't see that happening any time soon.
Easy, own both, no worries.
"Buffett said of Gold."
Buffet made his fortune by picking good and sound companies in the historical post-1945 economic boom.
While I do recognize his intelligence and talent, one must acknowledge that someone who is good at a precise subject has not necessarily an accurate view of the larger picture, which is also partly influenced by his generation. The legendary antigold viewpoint of Buffet is the viewpoint of the System (the post-1945 world, the mainstream medias, etc.)
It is my view that Buffet will end his life with far less money than he currently owns. It will teach a moral lesson to many of his blind followers.
For the rest, it is true that gold evolves badly in a deflationary environment (though, in the 1929 crisis, gold mining stocks outperformed other stocks).
But a deflationary environment never truly happens when there is a government. Governments hate deflation by their very own nature.
In France, we had a big deflation during the presidency of Leon Blum (1931). Instead of accepting this natural phenomenon, the Blum government decided to devaluate the Franc, artificially, by governement decree.
The very next day, savers across the country found out that their 100 Francs had become 10 Francs. Only gold saved the value.
il grande Charles:
but the Oracle (notice the O-thing) has a long way to fall, he's already sequestered his "obligations" and laid off the bet to Bill and Melinda.
So, he's just playin'
OK, playin' serious-like. Got his cards and his Coke, but, biding his time.
- Ned
I'll take the "10 Exxon Mobils" you guys can have everything else.
I don't know dude. He bought over 125 million oz of silver like back in 1999 or so.
and sold it years ago....it turned into the SLV inventory.
Ok did not know that. Interesting.
Sure he is right about producing value. Thing is, that's only one of many concerns that gold relates to. Not only that, his line is used as a weapon "the seen" in order to combat the other concerns, "the unseen."
And what is the number one unseen concen in regards to gold? Which asset is going to retain more value? It is the answer to that question that makes gold the currency par excellence.
-Charles De Gaulle
The “catalyst” … gold & silver is money.
With gold or silver in possession, one can choose which fiat has the best potential, if any.
So, Buffett is saying gold will buy a substantial amount of income producing assets... a substantial amount more than it would have 10 years ago and no doubt, in my mind, in five or ten years time it will buy a substantial amount more again. So, Warren agrees with his dad in the choice between fiat and gold, it is just a matter of timing.
Gold is not an 'alternate currency'. Gold was currency for the past five millenia until Nixon, in all his wisdom and paranoia, decided that the dollar should be backed by nothing.
IOWs, the past forty years have been yet another experiment with a fiat currency and the outcome will be the same as all the other fiat currency experiments; ie, fiat to dust.
Untill people understand this they will not have a grasp of where the world economy is going.
Gold is not an investment, gold is once and future money. Why should anyone care how many fiat dollars an oz of gold is 'worth'? Physical gold at some time in the near future will enter permanent backwardation and no amount of dollars will purchase any amount of gold.
It's real interest rates that matter, not nominal. So if short rates were to go to 10%, but inflation were 11%, real rates would be negative 1% and thus the bull market in gold would still be alive and well. For me, the key point at this stage of the monetary cycle (stage 5 - monetary reform, is on the horizon) is that the Fed is stuck with ZIRP until the bond market collapses from the debt burden, then hyperinflation will set in from the dollar (Federal Reserve Note) collapse and gold will have the most powerful bull market in history. Physical gold is a real asset that is nobody else's liability whereas Federal Reserve Notes are a debt/liability of a bankrupt (or soon to be bankrupt) Federal Reserve. Even at these levels gold is only trading at about 13% of money supply. The unbacked paper dollar is probably the biggest bubble in the history of civilization.
Laurence Kotlikoff
"$200 Trillion Bitchez!"
Ok folks, I'm only going to explain this once, so please follow along.
Recently, you may recall Joseph Balestrino who said on CNBC, "nothing is in a bubble if people want to buy it."
In the article above, Jim Rogers said "While addressing a group of high-end money managers, he inquired as to how many of them held gold or silver in their accounts, and remarkably, 75% replied they had never owned either precious metal."
Now, let's work through the logic. First Balestrino,
People buying = Not a bubble
Which implies,
People not buying = A bubble
Now Rogers,
Gold & Silver = People not buying
Reducing these equations leaves us with the following conclusion:
Gold & Silver = A bubble
There, now you can see, plain as day, that gold and silver are indeed in a bubble, because nobody is buying them. Hopefully this will clear things up and we can move on to more pressing matters, like which beer makes for a better breakfast.
Does that exclude Guiness?
As a guy would go on a beer run before drinking the leftover Guiness in my fridge, I'd say yes, but as a freedom oriented guy, I'm all for letting the market decide.
Now, it's time to go imbibe in some dry-hopped APA, while I lick my wounds for being junked while trying to explain MSM logic. :(
http://www.youtube.com/watch?v=ayF1T_CdGro
msm logic=new classic
Buffett, smuffet...the guy sold out a long time ago. He is now a senile, old man that has bought into the propaganda sold by the administration. He is now just another contra-indicator for capitalism. I am surprised that Uncle Warren hasn't been appointed to some position in the Obamao admin yet.
Not that any of this is new anymore but all we need to know is that Rogers is a material/commodity bull while Buffett is a paper bull. Enough said.
"...while Buffett is a paper bull."
I've started to learn when THE Oracle is talking his book vs. what he's doing. viz. CEG, GS, GE in mid-Sept '08. Bent the lads over the table and had his way with them, fer sure. CEG bailed by the French, GS trying to get off of the inserted gaff, Immelt is so impailed that he'll never recover.
- Ned
[edit: who says he has no <fill in your blank here>. Do we trust BRK books after all of this time?]
Sprott's guy says there isn't a gold bubble.
Astonishing.
Now, how fast is gold going to go to $1700, that's my question.
My answer: Very fast. Take from that what you will.
Mr Embry's track record, while not perfect, speaks for itself. Some of the more well known gold analysts (and I use that word lightly) like Nadler and Gartman, have been almost useless to follow, and their advice completely wrong.
Silver to $30 and gold to $1500 by year end Bitchez!
What are you talking about...I confer with Nadler's daily writings to assess whether I should purchase gold...every day he is more bearish than the next so I just buy gumballs instead.
I like to buy Nadler's rhodium sponges that he shills for.
Nadler truly is sponge-worthy!
this entire discussion is irrelevant until people first address the issue of whether paper assets are in a bubble. is the spx in a bubble? is there a bubble in MBS? in banker fraud?
is there a bubble in fraud coming from this administration - a government built on frivolous debt, ponzi schemes, cover-up, corruption, kick-backs, 2500 pg pork filled, lobbyists sponsored legislation, - you name it.
we know many in power hate PMs; do you ever hear them ask if paper assets are in a bubble.
In 1895 my great Grandfather was a skilled craftsman in Detroit. He was paid a $20 gold piece (1 oz) every two weeks. Take that forward to today. A skilled craftsman earns about $2000-$2500 every two weeks. That implies to me that gold is worth about $2000-$2500 an ounce. Factor in that about 30% of the modern paycheck is removed for taxes and that would seem to argue for a higher gold price. Consider that in 1895 the U.S. was still filled to the brim with gold from Nevada and California mines and that would argue for a higher gold price. Factor in the increase in population and worldwide demand and I would guess gold should be priced at about $4000-$5000 an ounce. Why isn't it that high now? Several reasons: overvalued dollar, dumping of the huge Russian gold stores in 1990, and the fact that gold is not considered to be a monetary unit any more. Now, the dollar is falling, news is getting out that fiat money is driving to its intrinsic value, and gold is started to be hoarded by the rich. Gold will clearly be headed for $10,000 an ounce within a few years.
"The hardest thing of all for a soldier is to retreat"
The Central Banks now have that problem.
...except that Central Bankers don't deserve to be called 'soldiers' when they are really only mercenaries. Just cut off the flow of capital to that type and they will always turn tail, or they could even turncoat.
I wouldn't even compliment them by calling them mercenaries. Mercenaries have a certain code of ethics and war toward each other. These banks are cannibals that will eat anything including members of their own tribe.
I stand corrected.
October 25, 2010 - Current Contraction Surpasses "Great Recession":
On October 20, 2010 the aggregate severity of the 2010 contraction in consumer demand surpassed the similar measure of economic pain experienced during the "Great Recession." And a glance at our "Contraction Watch" tells us that the pain is not about to end anytime soon:
http://www.consumerindexes.com/index.html
Tyler-
You should post this
And here is the punch line-
"In June 2007 an accumulation of $2,000,000 in an IRA or 401K would translate into $100,000 in annual income when invested in 1 year T-Bills, an annual income higher than the per capita income in any of the richest nations on earth. That was certainly a reasonable target for a middle class household, and one that would allow a comfortable retirement without significant changes in lifestyle.
Today the same $2,000,000 (if it was somehow preserved throughout the "Great Recession") would earn $4,200 per annum if invested similarly -- or roughly the per capita income in the Republic of the Congo. No wonder that many "Baby Boomers" are increasing savings and postponing retirement to the chagrin of younger people desperately looking for jobs; the alternative is a third-world lifestyle."
In other words that money has become nearly worthless!!!
Prospects Weekly: Global industrial production activity has nearly stalled Submitted by Global Macroeconomic Team on Fri, 2010-10-22 14:27 Following fourteen months of vibrant growth, global industrial production activity has nearly stalled, reflecting the waning impetus from inventory restocking and a fall-off in growth of final goods demand earlier this year. More recent strengthening of capital goods production and retail sales volumes suggests that this is a temporary slowdown. However, if final demand disappoints, the slump could become protracted, with downside risks gaining greater weight. Movement toward additional monetary easing in high-income countries, while developing countries have begun to normalize their stances (Brazil, China, India, Thailand), has contributed to an upswing in foreign capital inflows to many developing countries. The associated pressure for currencies to appreciate has prompted a large build in reserve accumulation. Credit-default swap spreads for several high-income European countries eased in recent weeks, partly reflecting a temporary step-up in ECB purchase of affected-country bonds.
Global industrial output growth slowed to below its historical average rate in August 2010. The slowdown has been led by developing countries (excluding China), which posted a 1% contraction in the three-months ending August (3m/3m saar). Even in China, which posted third quarter GDP growth of 10 percent (saar), industrial production expanded at a modest 4.8 percent pace in the 3-months ending August 2010. Our baseline expectation is for IP growth to regain its historical trend. However, the depth and duration of the slowdown will depend significantly on final demand, the dynamics of which are mixed. Strengthening retail sales in Europe, the United States and Japan; slowly improving labor market conditions, and strong machinery and equipment sales point to firming demand. However, declining exports in Japan and Europe, and a still deteriorating housing sector in the United States point in the opposite direction.
http://blogs.worldbank.org/prospects/prospects-weekly-global-industrial-...
Nailed it. That speaks volumes.
Keep your powder dry and your bitchez close.
When my stupid ditzy neighbours tell me at the the next community party that gold is the rage and what did I pay ABX then we have a bubble - until then party hardy farty
"I don't know what effect these men will have upon the enemy, but, by God, they frighten me"
Perhaps more correctly.
I don't know what effect these Central Banks have upon society, but, by God, they frighten me.
Is it going to pop?
"Soon, but not yet....."
"Is it going to pop?"
As measured against?
""Is it going to pop?"
As measured against?"
Poop.
That would be shit.
Yes it will poop.
Soon War.
Pooper scoopers bitchez?...LOL.
I happened to notice the post 1982 penny looks as though it's been crapped on as well.
The fate of fiat.
i really hope so then i can buy more
"Robot" is appropriate. Same shit, different day....
You ain't got a set of cojones unless you post this graph:
http://www.ezimages.net/upload/5MIN/052610_The5.PNG
How's your "bubble" doing so far?
"Nothing except a battle lost can be half as melancholy as a battle won"
Will Bernanke say this when he sees the rape and pillage of his troops.
The man is beyond idiocy.
He is Vain.
Wellington was neither an idiot or vain.
Though he did enjoy life.
http://harveyorgan.blogspot.com/
Harvey got a new computer over the weekend..spent forever hooking it up. some guy on here named turd quipped about it. read every now and then. idk, read, figure it out, make your own assumptions..i don't give a flying fuck..been hiting the sauce hard for months now after 4p..this shit is depressin...oooops...
"equity panics nearly always precede and concur with devaluations. After several weeks or months THEN the stock market begins to rise but NEVER outpaces the drop in the currency."
You've described what's already happened & is still happening.
"While they may initially get caught up in an equity downdraft they will be amongst the first to move higher sensing the devaluation."
Yes, already happened.
“Wise people learn when they can; fools learn when they must”
So. Let me see if I understand this correctly.
Printed or Digitised “Currency” can be created at the “Will” of those whom having the “Power” to do so can steal your every effort?
Are you with me so far?
Good.
What is happening here is that the Central Banks have not lost control of the money supply.
Get it?
They have absolute control of the money supply.
Get it?
The Central Banks can double the money supply.
Can you double your effort?
Central Banks don't lose control of the printing presses. What they cannot control is whether anyone will accept the bills produced on their printing presses.
I appreciate Mr. Embry’s citing Victor Hugo: "An invasion of armies can be resisted, but not an idea whose time has come."
I've been following the metals for a long time, especially silver this year. Today's action was riveting. There were moments when seemingly *nothing* was happening on the charts -- not due to any time-out, but on the contrary: Both sides were pressing full might, neither prevailing. Today's "mere" three dimes up represents a significant turning point, the first non-POMO up-day for the metal since the day before Oct.2010 options expiration.
The Comex trades of late some 61,882 silver contracts, each 5,000 ounces, against (supposed) physical stocks of roughly 112 million ounces.
112,000,000 phys. oz. ÷ 5,000 = 22,400 contracts
but
61,882 contracts x 5,000 = 309,410,000 "ounces," real + paper
At $23 per ounce (by whatever form) spot, you're looking at about $7.17 billion.
But oops, we've got a fire. The paper goes up in flames and all that's left to show for the $7 billion is "only" 112 million ounces -- each now repriced to cover funds against at sixty-odd bucks apiece.
Like everything else, metal trades fractionally. For now.
This (true-life today) example is so simplistic it's almost embarrassing to put it across as if with authority. The point though is that the value of that real coin in your hands way exceeds the number of fiat chits some postured authority assigns it. Metal prices currency -- not the other way around as we've been taught and conditioned. That's why the PTB are so afraid of it.
//
Principal = Principal + Interest, right?
Sure, sure, no prob... Hey, wait a minute. No, that's not right. In fact, it is an impossibility.
Well... impossible only if we think in narrow terms of there being a finite amount of Money (by whatever name). What if we added some "money" to the pot to allow for the interest repayment? Sure, that works -- for awhile.
Well, how 'bout this? Why don't we just add money to the pot forever?
"Now that's a bright idea, Ben. Didn't you mention you still don't have any Nobel Prizes on your bookcase? Incredible. We can fix that too."
//
I find myself running from, or saying Fuck it to, an Origami Bird who's more afraid of me than I am of it (a noisy squawker who has to cheat and bitchslap to get its way). It is afraid I'm gonna actually convert its linen chits, the number of which it constantly expands, to a chunk of something that is finite; but worse, something that has no counterparty, a chunk of something that excludes the Origami Bird from my business. It cannot meddle where it cannot go (cf. Rothschild).
The revolution won't happen within any conventional construct (i.e. politics, itself a dead construct). The PTB have both the main and the loose ends of this five-century construct wrapped. My part in the revolution comes the day I take the first step to opt out of the alien construct. I've got enough virtual-whatever in my life. If only for sanity's and privacy's sake, let my money aspect be real.
It's coming time to vote -- Their game or mine; Virtual v. Real.
"If only for sanity's and privacy's sake, let my money aspect be real."
Dear God.
What in your life ever allowed you think that you had sanity, privacy or money?
The Central Banks own all three.
Starting with money.
Double or quits?
What in your life ever allowed you think that you had sanity, privacy or money?
lol. So right, my Lord. I do however prefer the illusion that how I'm crazy and exposed and broke is by my choice.
Their game or mine; Virtual v. Real
:)
Gold & Silver bubbles. So how many people are buying Gold and Silver over 1 oz? Maybe 3% of the population possibly 4%? Boy that seems really high. Well... I would look out because this is one fucking HUGE bubble!!! Stand back, it's going to blow your head off!!! Looking forward to the next dip.
good stuff. was a horrible 'gold bubble' piece on business insider earlier - one of the reaons gold is supposedly in a bubble is because the fed is printing so much money and will raise interest rates at the first sign of reinflation. what a laugh, seriously! isn't it even the feds publicly stated policy to actually create additional inflation (but just a little tiny bit) right now. that's on top of waaaay understated CPI figures and its clearly IF not WHEN rates go up considerably and if that even happens before it all comes crumbling down. then we'll see the gold 'bubble' pop to the upside. anyway...
With banks in the trouble they are in nowday's ,our ansisters would
already have cleared the exchanges of every gram of gold.Think
the people of today are more brainwashed then ever before in
history.Bankruns are not like they used to be,people will run to
the banks again to withdraw their cash to find out they just hold
wortless fiat paper.
People buy metals on fear. How afraid do you expect them to be in say January?
People buy metals because they are sick and tired of
being robbed.Gold and silver are the best way to protect
you from insane gouverment/central banks,this is a proven
way historically.Can not give you an exact timeframe,nobody
can.Sure can feel the pressure building up more and more each
day,till it snaps.The best thing a man can do is prepare himself
to protect his family.
Pretty good article in der Spiegel about the speculators and copper prices.
http://www.spiegel.de/international/business/0,1518,724140,00.html
Something which is a certainty is that eventually the only place that USD can buy real assets are in the US. Those purchases can be physical assets of gold or land. Those assets can be the paper assets backed by the real goods that produce incomes, that would be the stock market. I expect that is the meaning and logic of the Buffet comment.
To me it's still just a trade. I don't get this mindset of PMs as "investment"..like say farmland in Brazil is. Wake the fuck up gold nuts.
it really depends on the ultimate end-game and how equilibrium is restored to the worldwide financial system at the end of all this. i'd say silver is much more of a 'trade' that one will want to exit, although the relative floor for it just in commodity terms will be way higher than today.
Farmland isn't portable. And you often have to pay taxes to keep it, serf. Otherwise I agree it is going to be good to own some arable land right smartly, but gold is far more fungible, liquid.
Give your head a shake paperdupe: it's tripping balls.
What a bunch of idiots on tonight.
You'd think they had never looked at a gold chart over the last 25 years.
Figures.
Gold is no investment,gold is the ultimate disinvestment.
Gold is the ultimate money,people will always need a
liquid asset to trade with.
Think farmland is a great investment nowdays.
You are right, I am nuts about gold.
Tomorrow is expiry in Gold/Silver so expect another assault from the shorts soon !
Overnight ?
October is not a big deal. Meaningless compared to December.
At any rate, gold does need to move convincingly through 1350 for us to see more short term upside. I'm quite certain that it will between tomorrow and Thursday and it will then be allowed to move to 1365 by next Monday. Expect Blythe to throw the kitchen sink at it there so that she can paint the tape with a head-and-shoulders top.
From there, its all up to HellyBenny and the size of his QE.
Your analyses are always spot on Turd and very
usefull for traders.I am not a trader in gold,just
a saver.December is a month of physical dilivery
I supose?
These assaults are the goldbugs best friend,gave
me some exellent oppertunities over the years to
accumilate more on the cheap.BRING IT ON !!
Just wondering if Johnny baby could take a minute to explain what the PHYuck happened to their fund today?
After listening to my silver call early this year, my entire office bought trunks full of silver coins and bars.
Today, I am LOVED as a result.
But - silver is yet to get me laid, even in large sums in my safe.
Cue: gold.
Of course I jest.
But - there's undoubtedly a sexual conquest premium priced in gold, someone needs to do a research paper....
http://bigpicture.typepad.com/comments/images/lereahbooks20.jpg everyone has their wares to tout
I don't think there's any such thing as a gold bubble. I think it's inversely proportional to confidence in human systems of exchange.
If gold were to "crash", it would mean alternate investments got much better, not that gold was intrinsically flawed and full of fraud, like the mortgage market. Bubble is the wrong word and shows the continued sloppiness of business news outlets using words to misrepresent concepts.
When gold hits new highs, they should just say, "the system sucks more this week"
The FT is not finished with its gold bashing - on the back page of Saturdays FT John Authers had a very weak piece on Gold.
Entitled "REMEMBER 1980 : ALL THAT GLISTERS IS NOT GOLD"
The core of his argument was that Gold was a optimistic investment dependent on CBs ability to stoke inflation.
He seems to regard a deflationary scenario as bad for Gold as Bonds continue to produce cash - liitle realising that the monetory system is no longer tied to Gold and therefore cannot handle any deflation in a debt fueled economy.
The feds cheap money is flowing into commodities in the continual chase for yield.
The fundamentals may be good for long term aquisition of gold but not at this price
bubble. When the next crisis hits by next year, gold will unwind dramatically. Confirmational bias is rife and impossible decouplings are expected.
I do not see Gold as a commoditiy - silver could get a hammering not unlike what happened in the last depression but the dynamics are different now - we are in a debt based monetory system now and massive deflation would put a series of spanners into the credit production engine.
If BB could buy Gold instead of creating more debt then the Treasury could take the losses from all the bad paper on the FEDs balance sheet and would reduce the price of oil,base metals and food in Gold terms as the mercantile states domestic consumption crashes as the dollar system collapses.
Fiat do not chase yield under these circumstanses - it seeks safety - not all middle class families are in debt - the European core middle class will deploy their savings and buy 10 or so philharmonics as well has keeping the bulk of their liquid savings in the local post office.
wnership of mining stocks is just another form of paper wealth. And paper wealth is only as valuable as the promise it is based upon. Ask the senior GM bondholders about the value of a promise. The US government is already counting ounces in the ground as "strategic reserves". Do you think they give a hoot who "owns" them? Gold is not as much as an inflation hedge as it is a default hedge, that's why it turned and rallied in fall 2008 when the CRB and the Baltic dry were in a freefall collapse. This is not like the last depression where they changed the rules and the Supreme court ruled against Roosevelt. This time they are using the rulebook for toilet paper. Today it is just as much true of lead as it is of gold; IF YOU DON'T HOLD IT, YOU DON'T OWN IT, PERIOD! Try shaking those shares of Perubar S.A. in the face of a home invader and let me know how that turns out for you.
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