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Open Interest In COMEX Gold Futures Hit All Time High At 603,094
Comex is reporting that as of June 18, the open interest in gold futures surpassed 600,000 only for the second time since May 17, hitting 603,094 lots. COMEX gold open interest climbed 5,712 to 603,094 lots on Friday, surpassing its previous record of 601,014 contracts set on May 17, Reuters notes. On Friday gold closed at an all time high price just shy of $1,260. Reuters reports that according to analysts, a "record open interest, an indicator of overall market trading activity, could lead to increased volatility in gold futures." Little did analysts realize just how prescient they would be with this simplistic summary, on a day when a commodities fund is rumored to be in its death throes, leading to a major drop in spot gold. Also don't mind opex: that's completely irrelevant.
We will report on the latest holding of the GLD, which as disclosed on Friday when we first reported about Saudi Arabia's doubling in gold holdings, is now the 6th largest holder of gold (some would disagree) in the world, bigger than all of China, later today, and everyday, when the updated NAV comes out.
In other news, post today's "murder", gold is back to Thursday levels. After all, hedge funds can't always liquidate their holdings in the desired direction.
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open interest is a fairly reliable contrary indicator. Today's correction is well needed.
And, not mentioned or reported, is how many of the new contracts were initiated as shorts, by The Evil Empire, in their desperate attempt to cap the price.
Exactly!
The four big bullion banks are massively short gold and will be pulling out all the stops to try and bring the price of gold down. Led by none other than JP Morgan who just happen to be the custodian of the ETF GLD gold bullion! If JP is forced to cover their shorts - guess who gets the gold? And guess who gets the shaft? Hmm...
Once JPM is done alleviating its short positions they inherited from Bear Sterns (I predict it will be once silver hits its NOMINAL high of $20.92) the markets, all the markets, will begin to capitulate violently. We are in the early stages of this, obviously, but even though THIS IS THE SHTF, we ain't seen nothing yet! I have predicted $20.92 by mid July.
The capitulation should last about one month (2-6 weeks), and then we will see "Freegold".
Interestingly, my time frame coincides with Bohimian Grove's Summer camp, where the say quote, "We are safe here in Bohemia, in the midst of the summer, from the cares of the rest of the world." Yes, they are weirdos.
Perhaps...
I still foresee a major 'manufactured' or cleverly timed liquidity crisis in the future where all assets will temporarily plunge due to lack of buyers. At this point the shorts will all exit and take profits. The Fed will then inject massive volumes of cash ($5T?) into the usual suspect banks (GS, JPM) to prevent further collapse in asset prices... they will then buy massive PM longs... and other assets... and ride the wave of 'free money' inflation all the way home leaving somebody else holding the bag.
It's Goldmans MO remember.
Think about it... we will all be screaming for them to do it!
And Congress will sign off on this??? QE obviously has not worked so far, but the sheeple will buy it again??? How could this happen??? Logistics please!
I still think that the Hollywood Futures Index could allow money to flow into a new bubble, increasing velocity, and depreciating the dollar all at once. If this happens I think that JPM and GS will drop their shorts as to not get burned.
And if it is not allowed, then all assets could move to the USD, and then the stronger dollar could fund the US for 6 months until the IMF and World Bank issue new currentsea.
I must be imagining things then (sometimes I do)... because I distinctly remember some bill passing that gave emergency liquidity provisions to the Fed that by-passed the congressional approval process altogether perhaps a year ago or so... I'll try to find the articles.
That said remember the major drawdowns that were left uninvestigated when the run on liquidity began in the fall of 08?. Anyway... it's really a moot point because when you have a crisis of the magnetude we are going to experience next... Obama will do whatever they want them to do even should the need arise to do it clandestinely through reciporical bogus Fx swaps or some other creative strategy if need be. We are in a different game now and it will end some time. They can not have a collapse in confidence yet again... a run will most certainly ensue. And when faced with a crisis in the form of a ticking timebomb that no doubt will end up on congresses doorstep mere minutes before the system implodes.. all caution and reason will be quickly thrown out the window.
Ben will not make himself look bad like he did at Pelosi's knees in 2008 again when he prophicised immediate doom should congress not act immediately. This time if they refuse Ben and Timmy's request... it's the members of congress that will end up taking the blame for failure to act.
Those are just my thoughts so straighten me out if you disagree... I hate looking like more of an idiot than I already am! :)
Great post! Ima frame it!
are you sure Bear was Short Gold ? I've read that view many times, just mis/dis-information. I've also read about Bear's Short on Silver but few mention that was originally the Short of AIG. You might want to research/google [ Bear Sterns LONG GOLD ] and see another side, rarely mentioned. Bear was Long Gold hugely $12-Billion Long Gold Futures. They were also Short the USD at the time, both positions Highly Profitable. ---well, here's a link:
http://www.marketoracle.co.uk/Article6724.html
GOLDMAN SACHS PAINTS THE PICTURE
Some clear indications are coming to light. The Wall Street firms are both banding together and at odds with each other. First a preface. The Bear Stearns kill job engineered by JPMorgan has numerous stories behind the public face story told. Some of my views have been shared. Here is more. Bear Stearns did not participate in the LongTerm Capital Mgmt emergency bailout rescue in 1998. They were punished ten years later. Furthermore, when the USFed opened the Bear Stearns books in March, they found a giant position that was short the USDollar. They found a giant position that was betting on a higher gold price. So Bear Stearns was killed, with the liquidation of their gold position responsible for a huge gold price drop, aided by the cover of their US$ position. See the mid-March gold price and US$ action. The Wall Street firms took notice of the message. If they bet against the US$ and bet in favor of gold, they would not have any further access to the USFed discount window or lending facilities. So now the Wall Street firms might be helping each other to stand up.
No LH, just demented pedophiles.
They want/need to cap the price because it's getting away from them. I am waiting for the "in your face take down" I keep hearing about. That should be their last hurrah. I look for the massive short positions to be covered. Possible comex default? From there gold will rise to untold heights. This should unfold over the next 6-12 months.
Dear Turd;
right you are. the great thing about Comex shorts for bullion-or synthetic shorts- is that they can create them like crazy and if they are out of the money, they just 'roll em over'.
As well, after they smother the market with their dirty shorts -sounds gross I know, but you are Turd Fergeson- then shaky longs get scared -liking seeing huge sell lots on your favorite stock-, stop losses get triggered, and spot price plumets.
You'd think Comex longs would wise up, but they are the same sophisticated investors buying USTreasuries...
All new JPM short ozs, right?
Is this Gold retracement today a gift? Load up the truck?
Not quite yet. Still room to fall before it's time to back up the truck.
wait for 1225
I was in the area (of my coin shop) so I went and bought some more.
Gold is going so high that your buy-in price will be a moot point. Plus or minus 5-10 % means nothing considering where this is headed.
As all my friends here have heard so many times:
As money comes to me, part of it goes to gold. Been doing that for decades. Will keep buying gold until I give it away. The power of giving...
Volume up at peak levels... perhaps time for a pull back. Thank you JP morgan and all the rest who would bring the price of gold down... I would like to purchase some more. I wonder if we can see a 700 level(I am dreaming). I would love to double my current holdings at that point instead of increasing it incremently on these tiny pull backs.
Odds are the saudi royals has a lot more gold than they disclose. Probably in Berne, not Riyadh.
Fort "Riyadh"? Or, Fort "Berne" then?
Albiet Fort "Tungsten" Knox.
Ft. N-AU-x
I'm terrified to trade these markets......covered gdx short....maybe put it back on tomorrow....
What is the cash flow of an APPL share? Industrial value?
Sorry to interupt ITG but....
10 more junks and his post gets deleted, which would be too bad, considering it is useful to see both sides of the argument, ridiculous or not.
I junked him at first but rescinded. I figure answering him is due justice.
See? Now people will not see how dumb that arguement was. Stupid junks.
I never suggested buying equities, I don't own a single stock.
I know you didn't but you commented that we are fixated on gold. The much larger fixation is on stocks like AAPL, relentlessly pumped by the financial media. The mainstream hates gold.
real estate is only worth what someone else is willing to pay for it, no? And you don't ever own real estate, you effectively lease it, as the gov't (state, federal, local) can tax it away from you at any time.
These are the kind of predictions that make posters change their handle...
I predict there won't be a "brockbrock" handle on ZH in 6 months...
brockbrock = master bates = JW = jory = Karl Denninger?!?
i know it is, 117. 2 weeks as member.
reeks of him from the first sentence.
It's OK with me to have the Bravos and the brockbrocks around, no problem as long as they behave.
Haven't seen Bravo around for a long time.
...
Hey velo. I did not have the oppportunity to comment when some guys jumped on you re the way you buy gold (as jewelry) a few days ago.
YOU are right, you do whatever you want.
I think owning some of one's PM in jewelry is brilliant. Yin and yang.
you do whatever you want.
thanks for permission dad,
I HAVE ALWAYS DONE EXACTLY WHAT I WANT TO DO†
I meant what I said.
I am 100% on your side!
You do EXACTLY what you want to do. Damn right.
That was me who jumped ALL over her. She was saying her state was charging her tax on coins when it doesn't. If she wants to buy jewelry as gold then so be it. She's a big girl. I was just giving her the numbers and questioning her defense of her position which wasn't entirely truthful.
There's people I'd kill don't kid yourself. But she is definitely not one of them. There's a big difference between being untruthful just out of self defense when your misjudging how important something is or just don't want to fight at that time, and being untruthful out of maliciousness.
So everybody relax. I'm not going to smash her nuts on an anvil.
I heart Krazy Karl and his nonsensical platform. We got rules for him....
Zero hedge. Slapping you so hard upside tha hed ya lose your damn NAME.
http://www.youtube.com/watch?v=AMGXq9_IQBQ&feature=related
I wish EVERY asset had a value of what someone is prepared to pay for it.
Know what I'm saying....????
Yea, like a Bennie Baby on Ebay...
Bennie Baby
Now that's a scary thought. :-)
Sorry, Brock, but this is absolute nonsense.
Gold dropped in the fall of 08 because it was a liquid asset in the midst of a liquidity crisis. Gold IS NOT an inflation hedge per se, it IS a true store of wealth. Always has been. Always will be.
As far as gold "having no value beyond what someone else is willing to pay for it", you just described everything else in the entire world. Your home, a new set of radial tires, AAPL all the same. None have any value beyond that which the buyer is willing to pay.
The reason gold attracts so much attention here is that most of us realize that gold is the perfect gauge of how managed and fucked our financial system has become. If gold were allowed to recognize it's actual value/price, the entire fiat/ponzi financial system of ours would become unraveled. Most of us cyncial, self-absorbed assholes are openly pulling for just such an outcome so that we can stick our collective tongues out at the masses and tell them to all go fuck each other.
So, you say gold is a true store of wealth, yet it's the first thing people sold in a liquidity crisis? Why would I sell gold if the market was tanking and I want a "true store of weath."
Everything you listed (aapl, radial tires, a house) produce no cash flow. I completely agree.
Being a landlord has been a pretty good investment for the past few thousand years, in every kind of market with any kind of currency.
You are confusing the hedge fund and algo-trading owners of gold with all of the rest of us.
Hedge funds met margin calls by liquidating other assets, including gold. Fuck! Where were you in 2008? Kindergarten? Why do I even have to repeat this for you?
When the next "crisis" arrives...and it will...we will use the temporary weakness to add to positions in gold (in my safe). It has been recognized money for 6000 years. It will continue to be so.
landlord = investment.
that just makes no sense to me. i being a past landord, meant i was a good investment. i don't think that's tangible.
maybe the property that the landlord owns is a good investment.
Cherry pick your data much? I mean, you only picked the highest USD nominal price in nearly 20 years, then the low point in the worst fucking panic in two decades of increasingly vicious {currency|equity|bond|faith} panics. How convenient to fail to notice the follow-through after the carnage. If you are honest with yourself, go check the spot price in USD (and EUR, and GBP, and...) over the last five years. Look at the forest, not the trees.
No one will argue with the cash flow argument-- aside from the central banks who loan gold out for cash-flow profit-- but saying that gold has little industrial value is just ignorance speaking. Gold has tremendous industrial value, but as a direct result of rarity, it is too expensive to use in all but the most critical cases, such as the computers we are all using right now.
Real Estate Is A Liability. Repeat after me. Real Estate Is A Liability.
Jebus, what a duh question. You sell your winning trade (gold) to pay off the losses!
And let's face it, if someone is dumb enough to get trapped like that, they will reek of desperation. That's the one time you'll see a stoneface wealth accumulator crack a smile-- knowing that someone must sell is the time and place to throw the lowball. It is as good as throwing hunks of bloody meat into shark infested waters.
More to the point of your question: if you're not foolish, if you don't employ leverage to self-assfucking destruction, you do not need to sell... because a liquidity crisis is someone else's problem, not yours.
And during the spring of '09? I'll answer, as obviously this is a rhetorical question; it had already decoupled in your fall scenario.
Real Estate as an asset for cash flow? Laughable! Real Estate has been propped up for years, after its bubble burst in '05. Tell me, how many people own (owned) houses? How many people are losing paper money and credit or lost all their money and credit on real estate. Also, tell me how many houses there are. I see houses wherever I go! I see no gold, except in creeks in the mountains. Do you know where these creeks are? Not many people do. And good luck getting to said creeks once oil slides to the downside of production, if it hasn't already. And there is another topic; you want to buy a house now that oil production has plateaued? How will you get to and from your house/CRE once oil is $200/$500/$1000pb???
Gold and silver is money, paper is not; throw both in a fire, see what happens.
In response to repeated allegations that fiat money is just "paper currency", central banks are fighting back with plastic currency coming to a serfdom near you!
http://www.thestar.com/news/gta/article/775427--canadian-currency-to-go-...
So you don't want paper money anymore? Your voices have been heard... <sarcasm>
What will these idiots not think of? They have way to much time on their hands.
Plastic burns too, and is highly toxic....this new FIAT is a eugenicist dream come true.
petro-dollars, literally
It get's better:
"According to the federal budget, Canada’s loonies and toonies will also be undergoing a transformation in 2011, with a new composition that uses the Royal Canadian Mint’s cheaper “patented multi-ply plated steel technology.”"
I'll answer you directly here. We are looking at a world where the dollar loses value - if you want to suggest the apocalypse that's a different question.
Real estate, CRE that is, like an apartment building (for those that can't afford to buy a house), has use to most people. Granted, buying an apartment building is a bet on a market and that having a home is something people value. I think that is a safe bet. Whatever the inflation situation may be, if you want to argue that NYC will crumble and people will live in shanty towns, then go ahead. Historically, land owners have done pretty well for themselves, and being a landlord affords you the ability to pass on inflation directly to tenants. If oils is $1000 a barrel, housing markets in a central location will outperform others. Guess what? If I want, I can make my tenants pay me in gold if the dollar is worth nothing.
If you are banking on the end of the world, please explain why anyone needs gold, or how it would hold value in any Mad-Max scenario you are proposing. Land to grow food, seeds, clean water, or gas, all things that are barterable. Gold is not one of them, and certainly not at today's prices (vs. how many pounds of rice you could buy).
I really would like to know how keeping a gold bar in my closet will be a bettter investment than any asset that produces inflation adjusted cash (take your pick).
Most individuals can't or don't want to own CRE. You don't save in CRE, you speculate. CRE is levered, gold is not. You are comparing apples and oranges.
Speculation depends on the market and the asset. You can buy very boring assets whose value is reflected by their underlying cash flow. If you are worried about deflation cash is the safest asset. If you are worried about inflation, I would prefer an asset that have variable cash flow. In 30 years, gold bars will be gold bars, a convience store or gas station (low capital CRE) will produce rent to feed your family, which is more than a gold bar can do.
Gold investors are speculating that somone will want their gold in 20 years, for a price at or above current value, and there's nothing absolute about that. CRE is a bet that land and property will have some kind of value (that may even fall from current levels, but still produce cash over time).
I prefer gold to cash in deflation, and every other type of flation. See the Great Depression.
Well, I will agree with you on one point: Centralized location that does not rely on petrol power. Throw in arable land and I am sold! But here is your problem: First, there are many many many houses...why would someone choose yours? If it is not the said property (centralized/energy efficient/arable) you are out of luck. And let us look at a map now; 9/10ths of houses are now out of the money. Especially considering over half of homes are in suburbs. So, yes, if you are choosy, go ahead and buy real estate. As for gold.....gold is and always will be. We use gold that was mined by Romans and Mayans thousands of years ago. It is tangible. What gives it value? It is a finite resource, one that is in its backside of production; it is hard to come by. As for your "gold standard"; a misnomer, banks hoard gold still. This to loan it out as the first loan of recourse. This making it an asset and a reserve on their balance sheets (depending on which side of the trade they are on). This to get the FIAT ponzi rolling. There is your gold standard; the banks, CBs et al, use gold as leverage. So if the market is to die another day, so will gold. And in a "Mad Max" scenario, whatever that means, paper will not be trusted, and gold and silver will once again be used as a medium of exchange. Gold for large purchase items, silver for small ones. The ratio will be like the lunar calender abouts, 13:1.
You have an apartment, you want a goat. I do not want an apartment, I want a cow, and I have a goat. I will of course accept gold for my goat, but you have no gold. "Why would I have gold?" You ask. You say you will find someone to live in your apartment for a cow, you go. You come back, but I have already sold my goat for gold, and I bought a cow. You now have a cow and no goat. You ended up not only wasting your time, but you have an asset that you do not want. You must know that medium of exchanges are necessities for free trade? Precious metals trump all, puka shells and paper IOUs etc.
Lastly: Said "today's prices"...fixed by whome? The Fed? Zimbabwe? Whose prices? Fascist prices? If the system goes bon-voyage, what is a price....what is a number???
Gold bar in your closet, in a safe, will stay there. Relying on tenants to pay rent in America, where there are no jobs, this is reliable??? Ask yourself, who and what can you rely on? Who and what can you trust? What if your apartment burns down without insurance? What if the tenant destroys it and bails?
Let's look at Detroit, and assume the country is headed in that direction. Shockingly, some people do still pay rent in Detroit. Have those apt buildings lost value? yes. But, they still throw off cash. If the dollar becomes worthless, rent will go up. I don't know how gold will perform, but to me I can still make money in a shitty economy, retain all of the upside if things get better, and be inflation protected with real estate. There are many factors that go into the price of gold (how panicky people are, market psycology, etc), and historically it has been a very volitile asset. Gold didn't do very well in the depression (edit: post 1933, in terms of holding value). So I don't know if the price I'm paying now will hold up in the future, gold holds no firm correlations. A lot of people bought gold in the 1980's at today's equivalent price of about $2,100.
There are laws that will protect my land and property - what if someone steals your gold? Pretty hard to steal a building. Insurance offers protection, if there's no insurance, well we probably have bigger problems.
In any 'mad max' scenario where millions/billions of people die, the amount of gold outstanding per person would only go up. Granted, CRE is worthless here too, but I just don't see that gold arguement vs. buying a well stocked bomb shelter at todays prices.
Rent goes up in an inflation scenario? Wages are not going up, so this is a stagflation scenario. I hope you are charging month to month too, and again, how will these out of work Detriotians pay you?
If the currentsea is worthless, you demand gold...good luck with that!
Panicky gold hoarders? The reason people BUY gold is because they panic. Market psychology? This market? This market is going schizo because of all the manipulation. Gold was pegged to the dollar in '33, and was a reliable asset until FDR stole it all. In the 80's the US government was still functioning and Treasuries sold. This is the end of the US and all the other Nation States know it. Raising interest rates will not happen due to the amount owed on the the debt. Laws that protect your land and property in a collapsed economy???
What if someone steals the gold? Then you did not do a good job hiding it!
Billions of people dying? Woah, I'm gonna start a well digging business for sure.
well digging business is damn good money. even being a water witch, which i used twice, honest.
just ask me. i had to drill two wells, at least 200 ft. deep fuckaruh.
hundreds spent drilling out damn dirt replace with submersible pump and casing.
B O O M water. oh no it's shale water, black shit water.
When this all ends, Ima find you, and we're starting a business!
Let's look at Detroit, and assume the country is headed in that direction. Shockingly, some people do still pay rent in Detroit. Have those apt buildings lost value? yes. But, they still throw off cash.
How does this even make sense? IF it’s fully paid for it may throw off cash (has to have a tenant...). How many lost everything VS those who made something? And what accounting system are you using? Have you added in ALL of your carrying costs (interest, taxes, maintenance...?). I’ve always loved the “I paid xxx for it and sold it for xxx – well, yes. But if it involved financing you have to add the interest payments into that “I paid” part. Most conveniently leave that part out of the equation (because in general it doubles the “what I paid for it” part).
If the dollar becomes worthless, rent will go up. I don't know how gold will perform, but to me I can still make money in a shitty economy, retain all of the upside if things get better, and be inflation protected with real estate.
I heard this argument in the 70’s. An incredible number of owners lost their butts... I heard it again in the 80’s, and then we had the S&L crisis – and an awful lot of owners lost their butts... I heard it in the early part of this decade again – and we all know how well it’s going this time.
There are many factors that go into the price of gold (how panicky people are, market psycology, etc), and historically it has been a very volitile asset. Gold didn't do very well in the depression (edit: post 1933, in terms of holding value).
Ummmm, they made it illegal to own it, so kind of hard to say how it did as no one could admit to using it... One might want to take a look at the estimates of how much the Gov. Actually managed to confiscate though – an awful lot of people felt the risks of going to jail didn’t offset the benefits of holding onto it. What class of asset hasn’t been volatile over a long enough “historical” time line? How many have ever managed to always be worth something, no matter what was going on?
So I don't know if the price I'm paying now will hold up in the future, gold holds no firm correlations. A lot of people bought gold in the 1980's at today's equivalent price of about $2,100.
And this is different than which asset class when bought at a top? Still, up or down, it is always tradable... One doesn’t need to worry about markets seizing up – or worse, having to show up at a closing with cash to pay off the difference. Property can be a very major resource trap, especially when leveraged (as it almost always is).
There are laws that will protect my land and property - what if someone steals your gold? Pretty hard to steal a building. Insurance offers protection, if there's no insurance, well we probably have bigger problems.
One can insure anything they are willing to pay insurance for. Any insurance is only as good as the counter party...
You really seem to mostly be arguing against yourself with little understanding of the contradictions of your commentary. Everything has “risk”. Few in here view PM’s as a money making type of thing (maybe if you are playing in the paper GLD market, but all of us advise holding physical for the long haul...) – it is the ultimate insurance against everything else, and a store of wealth. I care not if my “savings” MAKE money, only that they be worth something when a future need may arise... When interest bearing paper is paying close to nothing, and counter party risk is impossible to determine due to black box accounting schemes, it is the type of insurance that can’t be purchased any other way.
> "But, they still throw off cash."
only if market rent > carrying costs, otherwise you throw off cash to them
just creeks, no river's, hum.
i lived in silver city for like 38 years.
explored all the mines in the mountains. deep and down and carried around a candle, to judge level of oxygen in the b i g rooms we stay and tell stories and smoke.
was my initiation when i first came to town and wanted to hang out with the cool native local boys. young and dumb, would not do it today. plus they sealed entrance.
Creeks are easier. Sounds like you had fun!
The history books are full of price stability. Political stability too for that matter.
At the end of the day, we buy stuff with dollars. Not gold. Gold hit huge highs in the inflationary 1970's and early 80's and fell back to earth hard. Unless you sold at the top your initial investment did not perform well. I would rather buy an apartment building that provides income, passing on rent that adjusts with the relative value of the dollar. There is real demand for a roof over someone's head. There is no demand for a shiny soft metal beyond hopes of a return to the gold standard. The apartment I buy will produce cash flow and therefore be a better store of value. If I leverage that investment with debt, my returns increase as the value of that debt falls with inflation. If the gold standard returns, I can trade the building for gold.
If you are banking on the end of the world, nobody is going to want your gold, they'll want food, water, and medecine. So you should be buying that.
You answered yourself instead of us, which shows how trite your argument is. Oh please hit my talking points, I hit yours.
Brockbrock,
Wrong. Another completely mindless gold comment. I heard that same dogshit from a hedge fund guy I know who lost almsot everything in the Madoff Ponzi Scheme. He said the exact same things about gold. He told me, "They will be throwing it from the rooftops if the markets crash". I laughed in his face then, and I am LMAO in yours right now.
I guess when something is so fucking stupid, one must respond to it, eh Mr Hendrix?
Brock, I don't have a trader mindset. I'm not trying to sell 'the top'. I save in gold, no leverage required. If you want to try to trade or flip real estate at the top, good luck. Lots of people went bust on that bet recently. Leverage works both ways.
I never suggested this was something to 'trade-in and out of" - in fact, I stressed that CRE is something that throws off cash, and as a landlord I can set how much cash that is. You can own something for 40 years, it will provide a consistent flow of cash (given there is any kind of market). If there is rampant inflation, the rent goes up beacuse I say so. Wheather or not gold goes up depends on the market for gold.
The market sets the rent not you.. What if wages are not inflating similar to the past 10-13 years?
Again, rent does not go up because you say so... I am also a rental property owner. I cant say i want $1000 per 2 bedroom unit in my area because the market does not allow it.
Costs will be rising for everyone, renters and property owners alike.. But wages will most likely be the last thing to rise, if at all, in a stagnant economy.
You have to pay your taxes and registration fees and loan money (you are suggesting investing right now, most people would have to go into debt to buy a RE rental property).
You said if you don't sell at the top, investment doesn't do well. That is true for most everything, including CRE. As for rent, well maybe you can raise it (if not rent controlled in your beloved NYC) or maybe you can try to raise it and people live elsewhere, cheaper. You assume you have pricing power, might not be true. If your cash flow doesn't cover your mortgage, well, you lose your apartment building. Cash flow, like leverage, works both ways.
As for 'whether gold goes up depends on the market for gold' the same holds true for CRE. And for everything else. Real estate is not risk-free, but if you want to deal with destructive noisy deadbeats tenats go ahead. I will deal with my nice, quiet gold bar that never calls me at night to unclog a toilet. To each their own.
> "the rent goes up beacuse I say so"
Good point. I forgot that there can never be more supply than demand in CRE
And I am. All are stockpiled in my bunker in Kansas.
Listen, Brock, you can own all the apartment buildings you want. I'm glad you got em. Someone's got to be landlord for hoi polloi after they are foreclosed upon.
I don't/won't ridicule you for your choice of "safety". Just don't come on here acting like you're smarter than everybody else because you've got this whole "gold ponzi" thing all figured out. Capiche?
Hah. Fair enough. There seem to be quite a few people who have this whole 'gold' thing figured out, and that's fine. I just think there are a lot of assets that can hedge against inflation, gold gets all the attention.
I think too, Brock, that we gold "people" have a special place in our hearts for the yellow metal because of what it represents to us.
Most of "us" are utterly, sickeningly disgusted with what passes these days as our free and fair markets. In order to create the illusion of wealth and stability, the Fed and their minions (the TBTF banks) are now actively manipulating almost every market, from gold and crude oil to treasuries and stocks. We see it for what it is...bullshit.
Gold is the key. For the charade to continue, gold must be suppressed and controlled. If it were to actually trade in a fair system (no bullshit ETFs, no tungsten-plated bars, no double-counted inventory, no JPM price-capping on the Comex, etc) the price might well exceed $5000. At $5000...well, shit, at $2000 for that matter, the jig is up. The average American begins to realize that its all a farce, that our economy is truly in shambles, that the stock and bond markets are simply playgrounds for the powers-that-be. Interest rates skyrocket as gold continues, then, to move higher. Interest on the US national debt consumes government revenue. The entire fucking system collapses. Therefore, gold must be held in place. It truly is the key to the current financial system. We may no longer have a gold standard as it relates to currency backing but the price of gold, however, has never been more important.
I, for one, do not look forward to complete societal collapse. I hope it doesn't happen. But the assholes in Washington and New York have led us to this point. The writing is on the wall. I will protect myself and my family by any means necessary. I will stockpile food and medicine. I own two generators. I store weapons and ammo. And I own gold.
I have a flame thrower dude, when the poop hits the prop im gonna be toasting cops and smelting gold bars with the same tin of petrol.
PREACH!
+1...You speak for many!
brock, keep something in mind here. Most of us hold gold as insurance against financial malfeasance by .gov.
I would bet that most gold bulls here (like me) hold perhaps only 5% - 20% of their wealth in physical gold. I am at 6%.
There are extremists here that hold up to 110% (borrowed money to buy gold and will not pay the money back) in gold though... And they are some of the most entertaining posters here.
do chin
brock is a zit head. with out assets , with out anything but a lap top.
this is a ten years old zit kid argument and attempts to put a bad light on gold .
in spite of the numerous articles , the huge buying of gold . we have the same anal remarks about gold.
with out a clue ,, except for his own spot light to illuminate his continued lack of debth, and shallow understanding
gold will be the backing for a more honest monetary system.
brock will come back again as a big spit ball
Hahaha!
+ the usual $1230 dumpster.
+ $1250 tomorrow?
That's another reason I like to see the gold haters around, we all get to see you rip 'em up. in style...
...
By the way, my brother met the girl who became his wife while they were throwing their trash into the dumpster at their apartment building.
That wasn't you, was it?
probably the trash lol
At the end of the day, we buy stuff with dollars. Not gold. Gold hit huge highs in the inflationary 1970's and early 80's and fell back to earth hard. Unless you sold at the top your initial investment did not perform well. I would rather buy an apartment building that provides income, passing on rent that adjusts with the relative value of the dollar.
You obviously have never played the real-estate game over the long term. It is not always possible to “pass on rent adjustments...”. At the moment we sure can’t. Just having paying tenants makes us happy at the moment. Oh – and you might want to explain your thesis to those who are in serious negative equity positions at the moment. I can’t recall our PM’s ever being in negative territory, being upside down or having negative cash flow (part of what your argument about land negates is taxes, maintenance and other such costs – it’s called a depreciating asset for a reason...).
There is real demand for a roof over someone's head. There is no demand for a shiny soft metal beyond hopes of a return to the gold standard.
Name one period in history when Gold could not buy you what you desired... On what basses do you think this will be different in the future?
The apartment I buy will produce cash flow and therefore be a better store of value. If I leverage that investment with debt, my returns increase as the value of that debt falls with inflation.
Really? So all those commercial properties are doing well these days? We have renters, yet after other expenses we are assuredly not “cash flow” positive these days – nor have we been for the past couple years. We didn’t buy anywhere near the top (over 10 years...) and never took out equity... yet it still, at this point, requires our adding cash to keep it... So go ahead, follow your advice & leverage up. Let us all know how well that works for you over time.
If you are banking on the end of the world, nobody is going to want your gold, they'll want food, water, and medecine. So you should be buying that.
Duh. If you’ve been reading here we universally agree that one should have all tradable necessities in their supply. If you have ever read any history on financial instability you would know PM’s always have (and likely always will for many reasons) purchasing power. If you had lived in the Weiner Republic you would have had a much better chance of procuring such things as you list with a few loops off of your gold necklace\braclet or what have you than any other means...
I’m always amazed at the “you can’t eat it” line of argument. Do you make your fine dining experiences out of a plate full of fiat money? Same thing with PM’s.
I thought gold, silver and the miners performed really well in Nov. Dec. '08. They quickly made 52 week bottom formations and have moved up in runs and dips, providing mostly reliable sell and buy areas. I was a green trader at the time, yet I made money. Luv luv luv gold.
what is the cash flow of dead beat tenants in a deflationary collapse?
that is a very good question.. and last time i checked banks arent too quick to renegotiate the principle you owe them because of deflation.
Even in an inflationary collapse it is a tough road.. Wages will not be leading the way for higher prices if we are destined to the inflationary path...
"As I've stated many times over the last couple of years, there's no chance that these precise changes... whether they be gold, silver, the Dow, or the dollar... can be random market events. As GATA's secretary treasurer Chris Powell said more than two years ago... 'There are no markets anymore... only interventions.'
In gold, the net short position of the bullion banks only increased by 5,367 contracts... practically nothing in the grand scheme of things. The Commercial category [where all these bullion banks hide] net short position sits at 27.9 million ounces. The '4 or less' bullion banks are short 22.5 million ounces of that... and the '8 or less' traders are short 28.8 million ounces. So, if these eight bullion banks weren't there, the Commercial category would be slightly net long."
http://www.caseyresearch.com/displayGsd.php
Insurance is being put on sale again, thanks to interventions. Or commodity hedgies imploding. Or whatever.
Thoughts on the volume spike around 12:50 today?
"Gold reclaims its currency status as the global system unravels" - Ambrose Evans-Pritchard
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7841961/Gold-reclaims-its-currency-status-as-the-global-system-unravels.html
Just another day of the same old manipulated BS. Gold-bugs stay the course and you will be better off then the kool-aid drinkers! I've hedged my bet and will either sink or swim when the collapse happens. I'll take my chance's with physical Au/Ag.
Gold down 2% as I type, frightening, just frightening (NOT)!
I know. Yawn. It's just a horrible drop. Yawn. I bet I lose sleep over it. Yawn.
Can someone explain to me (someone with zero understanding of the markets) how shorting gold works? I understanding THAT it's happening (and have read GATA's stuff and others), but don't really understand the mechanics of HOW it works. The BB's short sell in massive, coordinated events...but how, exactly, do they profit? If the price of gold is $1250, how does selling it for less turn a profit? At what point do they buy gold? At what point do they sell? I don't really understand the futures market. Perhaps a quick lesson? Any info would be much appreciated.
"One of the main advantages of trading gold futures is that you can short sell, which means that you can benefit from a falling market. You buy (go long) if you think prices will rise and you sell (go short) if you think they will fall. Another great advantage of futures trading is leverage. Unlike the bullion market, traders can enter the gold futures market with a relatively small capital thanks to margin trading opportunities provided by brokerage firms. Also, when trading gold futures, you benefit from a greater liquidity which in turn provides accurate real-time prices." - http://www.finotec.com/commodities/gold.php
Short selling in general - http://www.youtube.com/watch?v=3wdg9__Oq9w
Thanks for the video. This may be a dumb question but...For gold, what is it that actually drives the price down? How does gold go from 1250 to 1240 in a matter of minutes? Is it the act of selling short that effects the future price? The video seems to imply that the short seller is simply acting on news (the hurricane) that will affect the physical supply (of oranges) but I was under the impression that JPM and GS actually drive the price down. How does that work? And is there any way to know what the price actually is that's they are targeting ahead of time?
Doc, they're still selling and adding downward pressure to the market. Most often, they take advantage of moments of light volume, where they can come in with significant new short volume and drive the market down quickly, before buyers can place bids and react. Therefore, you'll see charts where gold makes $10 down moves in 5 minutes but it takes 5 hours of "normal" market action to make the $10 back.
The shorts can be quite profitable, too, for the bank doing the bidding of the Fed. By painting the tape, they can freak out the easily-scared, algo and hedgie longs and cause natural selling. It becomes a bit of a virtuous cycle for the Evil Empire.
Now, understanding that, you can view today's action in the proper context. The Evil Empire had established $1250 as a cap last month. By late last Friday, every single one of their fucking shorts were well under water. If the gold market had been allowed to continue moving up, their only option would have been to cover, thereby adding even more upward momentum to the market. They HAD to seize the day today and drive gold back down. Which they did.
Thanks, Turd. Is there a way of knowing what the price is that they are targeting? I remember last month (I think it was May 25th) it was just under 1200. And someone on the comments here had said that neither the longs or the shorts got paid (or something to that effect). How does that work? Is there a futures "sweet-spot" that they're looking to hit and is there any way of knowing what that is?
Doc, on this handy little chart, you can see the highs of early May and early June, established as a cap by The Evil Empire. 1250 will be vigorously defended but, as long as the trend of higher lows stays intact, 1250 will fail and the banks will have to fall back to fight again. My best guess for the next "cap" is the 1290 region followed by 1350.
http://jsmineset.com/wp-content/uploads/2010/06/June2110Gold.pdf
sweet, thanks
You da man Mr. Turd! Give your mom my best, and thanks for taking time with those of us who are learning here,,,
Simple answer, it's psychology... the more they short, the more negative it looks, as if they have inside info as to why it shouldn't be at this level.
This (usually) influences other traders to sell, because the don't want to be holding the long bag, which drives the price down.
Hey guys, just wanna say hello. Got approved by Tyler for Project Mayhem. Clean food please.
You found a lump, right?
Welcome, I think I'll call you TC if that's ok with you.
GCQ0 open interest is 375k contracts. Summer doldrums are here with investors and brokers at the cottage. There isn't the interest to push gold higher short of some act of god. Watch for price volatility to keep prices flat to down in order to shake out the weak hands as the GCQ0 contract expires. Gotta roll all those contracts so the heavy hand will come in on the short side and beat up/margin call all those trenders who bought in on the last rally. This will also test the fortitude of those looking for delivery.
Hello to all at ZH. I am a longtime reader and fan but this is my first comment. I, for many years, have had a sense of disquiet about our economic system and here I find discussed all the things that I have been uneasy about articulated by people who have a grasp of the mechanics of the market. This is a marvelous place.
The reason I am writing this to night is I had some specific questions about gold price movements and I am looking for input of all types on them. When the cftc hearings happened with their revelations of market manipulations, naked shorts, and the lack of physical gold in the system I made some bets that the price of gold would rise strongly in the month that was then the primary month for futures trading(this month now). My thinking was that people might try to squeeze the writers of naked shorts by asking for phsical delivery and the price on the spot market would rise as a result. Was this a naive idea? Has anyone heard o a scramble to obtain physical? I heard that last month was a record for transfers of silver at the lbma. Has anyone heard anything like that for gold? I am a novice trader with a very small portfolio but I am having a blast playing this game. In my own small way I have been getting the better of the robot algorhythyms and would like to continue sticking it to them so that I can buy some physical gold for my rrsp.
Thanks for any replies
In short, you are correct. Germany is running out, so is Switz, and if the buying pattern continues for gold/silver here in the US of A, the mint will run dry shortly. We are one swift kick in the balls short of taking down the system.
That being said, JPM and GS are burning all their paper trying to stop us. I think their gig is up in 8 days. Then, as the market prices in the fact that no vault is holding what they say they are (GLD included), the price explodes and people scramble for physical.
Look at today for example. The NY market was drastically manipulated, but now that it is over, PMs are slowly rising higher, marking their support.
Good luck trading!
Thanks for the reply. Do you think this hit on jpm and hsbc when their shorts go bad will be enough to wound them? Would they be a good candidates for a september put? I have been tracking some of those prices.
I think that the whole banking system could collapse. However, I think that we could see currentseas collapse at the same time. Nominally, it could look super strange, like something never seen before.
More speciafiaclly, I'm in the 'Numbers don't mean squat' camp. I assume my advice, except for PMs, is hard to trade.
Good luck trading!
Never underestimate the ability of the PTB to manipulate. As I put it to all my friends 3 years ago when they were all trying to tell me we had obviously lost our minds because we had sold all our holdings, fired our advisor (after a month long discussion about what they thought was going on) and sat in cash while we waited to see how things would shake out (we got out just in time) – when there is this much BS, manipulation, intervention and lying going on, what, exactly, do you have in your favor in regards to the market?
Everyone still has a tendency to think the same way they did at the onset of the great depression (Ver. 1.0). For some reason people think that knowing the game is rigged doesn’t mean they can’t somehow beat it (Madoff comes to mind...). I’m sure a few can and will – but it is a hell of a bet. Understand everything is pretty much stacked against you – so play cautiously.
JPM is a dangerous bet – they are working for the fed. The fed isn’t likely to let one of their whores fail...
The front month is Aug 2010 so I think the squid has a little more than 8 days. There may be a rally yet before the August contract expires to suck in more longs but I respectfully doubt a record high price before the end of July. The mining industry delivers 20+ tonnes into the short side of the market monthly. This is probably not taken into accout by warehouse inventories. So the Bullion Banks just deliver the physical from their mining industry agreements against their shorts.
You know my favorite part of ZH? Somehow we all conect on some other worldly plane....
I must have deleted it, or it was from a different post, but I too say eight days. Eight days people, no joke! Funny Dogbreathe, this life, funny....
http://www.lbma.org.uk/stats/clearing
Thanks
duncecap, if your trading works for you vs. the algos then that's great.
Buying physical gold now would be even better, especially if you have none. Physical only.
Gold is likely the best diversification for most people. Hurry up and get some, even if only a little. Buy more when you can.
Think about getting a gun or two and 500 rounds of ammo for each. It seems that most gold owners are gun owners as well.
...and silver...and platinum. Mmm Trinity.
Mmm... Platinum... Mmm...
My sentimental favorite.
I checked out your link to kitco re Pt. Was a hell of flash-crash-like spike up and right back down. Hmm.
I'm not a guns guy but I am definitely stocking up on canned and dehydrated food.
Duncecap, make sure you have a source of water and several ways to heat it. I also have stocked up on sugar, salt, coffee and alcohol. Those have proven to be valuable commodities in historical barter situations. I also agree with some physical gold and silver. Sounds to me like you're on the right track...