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QB Asset Management Rips Apart Roubini's "Spam Is More Valuable Than Gold" Thesis
QB Asset Management provides their rebuttal of Roubini's earlier piece claiming that gold is due for a violent and forceful correction, which was discussed earlier on Zero Hedge.
h/t Gold Bug
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Roubini is right...once everyone is unemployed, paper money is useless/nobody left to sell equities too, and commodities have become so cheap due to lack of demand that they are no longer produced only spam will be left to eat, which can be remitted only for gold
Your random blather summary makes about as much sense as Roubini's original piece. Bravo for the irony.
Spam's worth its weight in gold to me. I love it. As for me, I'm having Spam, Spam, Spam, Spam, Spam, Baked Beans, Spam, Spam, Spam, and Spam.
You're sleeping in the dog house.
if spam becomes amerika's coin of the ralphing realm in the 21st century,
I quit!
It tastes like shite.
send my ration to roubini in that event.
"Rations to Roubini" btw, is now the name of my band
We had bacon flavored Spam Sunday. Tasted good.
WELL IF ROUBINI IS CORRECT,SPAM MUST BE MORE VALUABLE THAN CRUDE OIL AS WELL.
GCC must peg single currency to goldDecember 15th, 2009
Today, Tuesday, the Gulf Co-operation Council is discussing whether to peg a planned unified currency to a basket, US dollar, or another single currency (1)
Qatar’s ruler, Sheikh Hamad bin Khalifa Al Thani, said last week at the Gas Exporting Countries Forum meeting that natural gas prices are too low and wants them to be linked to the price of crude oil. (2)
As oil is the only commodity in the world that is large enough for gold to hide in, gold is hiding in there. The GCC oil producers and exporters do indeed exchange their petro-dollars, which like the dollar itself have no value, for gold. Oil backing thus means gold backing.
The GCC should peg its single currency to gold.
It is the movement of gold in the hidden background that has kept oil and gas at these low prices.
Oil and gas must be billed at their correct “value” in an honest currency and this correct billing must be reflected in FreeGold.
MY COMMENTARY:
I'M NO FINANCIAL ADVISER, BUT LOOKS LIKE THE PRICE OF CRUDE IS GOING UP, THE OLD INVERSE WATERFALL GRAPH. NOTICE, IT IS NOT GOLD SEEKING TO BE PEGGED TO CRUDE OIL, IT IS CRUDE OIL SEEKING TO BE PEGGED TO GOLD. WHICH PROVES THE OLD SAYING; THE LESSER IS BLESSED OF THE GREATER. SO WE WILL SEE GOLD AND OIL ALLIED AGAINST THE CURRENCIES, $ INCLUDED.
% WISE, FEW PEOPLE ON THE PLANET HAVE ANY PRECIOUS METALS HOLDINGS. HOWEVER ABOUT EVERYONE DEMANDS OIL. IF OIL IS INDEED PEGGED TO GOLD GET READY FOR A PARADIGM SHIFT OF CATASTROPHIC DIMENSIONS. AND ALL THE KING'S HORSES AND ALL....
http://www.etaiwannews.com/etn/news_content.php?id=1128360&lang=eng_news
Gold to me is valued in Dollars. I had a bit until it hit $1050. Sold it to QB Asset Management.
Dubai implodes, Greece implodes, Europe implodes, dollar explodes. Gold becomes worth-less in dollars.
Gold to me is valued in dollars. I will buy a bit when it hits $400. Will buy it from QB Asset Management.
Peace.
why did'nt you sell it to them @ $1200.00
you will never, repeat, never see $400.00 gold again.
Are you eating your words? This comment is spam.
Why the gold, gold, gold always? What about AK-47s or M-16's and ammo, if you have enough of those don't you get all the gold you want? http://www.pitbulltrading.blogspot.com
"In fact, our ongoing analysis indicates gold’s terminal value in this cycle will be multiples higher than current pricing."
Perhaps so, but gold will still buy less spam five years from now, then it does today.
I think the core point of the analysis is that all paper currencys are dependent on debt and when debt cannot be serviced the paper will be monetized by central banks.
If you are of the opinion that gold is not like Spam(a expendable commodity) but money unburdened by debt you will begin to see the golden light.
How long does Spam last? Will cockroaches still be able to eat it after the apocolypse?
"Perhaps so, but gold will still buy less spam five years from now, then it does today."
Sorry. But there's about 2000 years of monetary history that proves you wrong.
An ounce of gold today buys about as many loaves of bread as it did in the times of Nebukadnezar.
See what your FRN's will buy 20 (much less 2000) years from now.
Now would that be the cheapie wonderbread stuff or the fancy 12-grain bread??
Nice piece. Gold's been awfully boring the past week...
ZH is by far my favorite finance site, but it's been somewhat plagued with goldbug nutters, especially in the comments section. I've done my best to rebut their "great arguments", now I'm glad to have Roubini on my team. Oh, also Buiter is also on board, and has taken a lot of heat for it. IIRC correctly Krugman had a few choice words, granted everybody hates him here... That's a lot of firepower to be going against with your little "gold will always rise in value" platitudes. My favorite argument is how anybody who pans gold (no pun intended) is a lackey for Bernanke-pants.
Look people, this is late stage market capitalism, your stupid bricks of gold will do nothing for you when the SHTF. If S really did HTF, your biggest concern would be the disappearance of property rights. In other words, "yo ass gonna get ROBBED". Something tells me that reading blogs will go the way of Sunday drives...
Keep hoping
NR - "The only scenario where gold should rapidly rise in value is one where fiat currencies are rapidly debased via inflation."
QB - "This is precisely the world in which we live today. What other world could he be referencing?"
Classic. As was the reference between events and chains of causality.
You get the prize...
Hi Miles...:-)
Impeccable timing.
Which came first, the debasing or the inflation?
ZING!
Question: Why did the Fed chairman cross the road?
Answer: To print more money, of course!
POW!
(too much 1960s Batman on youtube)
Less than twelve months ago Larry Summers was on the payroll of Roubini's company, moreover Dr. Summers was a part owner of that company. Dr. Roubini has heaped praise on both Summers and Geithner from the beginning. Roubini never declared this "professional" relationship as he was endorsing Summers.
http://online.wsj.com/public/resources/documents/disclosure-LSummers0403...
NO F&CKING WAY !!!
Will someone kindly tell me if this is for real because everything about DR. Doom > Gloom > Happy is finally making sense.
Someone is shitting me here... right? ... anyone?
True dat and he went on summer vacation with Soros...do the math?
Why am I always the last to be told....
Yes, Roubini is a slightly veiled political hack.
As opposed to Krugman who is a bald-faced political hack.
Even though he has a beard.
actually, i believe the phrase you are looking for is "bold-faced". so, yes, the beard on krugman absolutely still applies ;).
Thanks for that, I didn't know either.
Explains why my opinion of his views has shifted.
HOO-AH! QB IMHO knocks it out of the park
NR seems to be munching bluepill lately. Oh well, on a long enough timeline, everyone becomes irrelevant.
Get Ready. The Obama administration has a stealth debt forgiveness plan for the masses. Today, the GSE regulators indicated they will ask Treasury to increase the line of credit to the agencies by as much as 200-250bb dollars (from 400 to 650bb). It is my view that they are getting ready to forgive upwards of 600bb in mortgage debt currently guaranteed by the GSE in order to liquify consumer balance sheets -giving people incentive to stay in their homes instead of walking away. They are already blaming the wall street fat cats for the problem and with the failure of HAMP, are setting the stage for massive consumer debt forgiveness. This is the number 1 reason to hold gold because it takes the FED right out of the picture.
Remember - Health Care, Cap and Trade and mortgage forgivness - by ANY means necessary..
0
The programs for rewriting the Mortgages essentially do this already. Essentially, extend and pretend, with some residents not paying their mortgage for upwards of a year or more. But, there is still a lien on the deed, and eventually there will be some foreclosure sale and a recognition of the loss.
If the Government through the GSEs, step in and removes the lien on the deed for these mortgage holders, basically a handout for holding an unpayable note, the response from the people, myself included, will be swift and harsh.
Mark Beck
exactly - once it becomes acceptable to ignore contracts the system is no longer valid. Collateral means nothing therefore money becomes fiction. The govt will think they can contain the costs but the reality will be public outrage of unprecedented proportions. Remember most people do make their payments on time and where does that leave them? Govt on the hook for over 8 trillion in mtg guarantees between the 3 agencies and we still have one of em - the FHA - still guaranteeing loans for up to 97% ltv. When Does it stop? F home prices fall another 10% from these levels, 50% of all homeowners with a mortgage will be underwater. If walw aways become fashionable, the banking system is done. The idiots at the FHA and Congress - along with our President does not get it. They do noy assign a probability weighted risk approach to regulation and therefore they will always underprice the guarantee risks.
How come I keep getting pissed? I was already pissed? What is this new pissed-a-tude?
How about IRS forgiving billions of dollars owed to "us" by them. From Bloomberg:
Think they are gonna do that for the average taxpayer??
This is not the first reference I've read/heard regarding debt forgiveness or "jubilee," if you prefer. I have at least one question regarding this approach, if it is in fact true. What price is to be extracted from the "average citizen" whose debt is forgiven? What liberties and/or freedoms will be either willingly sacrificed by folks turning cartwheels over our rich uncle forgiving their debts or just taken outright by their benefactor in exchange for the forgiveness? The forgiveness will come at some cost. Only the "palm greasers" in Washington get true freebies.
More importantly, were our government to embark on this path, I say to anybody who thinks our society is screwed up now "wait'll you see what this does." A jubilee will send the most dangerous message possible to our society, risk doesn't matter, due diligence doesn't matter, capitalism is now dead. If a jubilee is in the offering, you will see a society where the small shred of trust we still currently enjoy is extinguished as a jubilee will basically complete the process of rewarding those who were irresponsible. As always, JMO.
+1000
Certainly would show how foolish I was to pay off my mortgage and not use credit cards. Instead, I would be rewarded with higher taxes and 1bp return on my savings. I've been a fool.
Emerging markets are twice the bubble gold is
the more doctor doom runs his head, the more he paints himself in a corner with no way out.......and , the more you see just whose side he is on.....
my dear ZH friends,
It is a pleasure to be in your intelligent company. Is there any reason to debate golds merit. For the preservation of wealth gold is an axiom. Gold requires wisdom, the patients of multi generational family stability, integrity. I wish you all well in the challenges that confront us. The shadow is spreading from mordor.
Wow, dogbreath, what a wonderful comment. Looks like most here at ZH do understand that gold is likely the best wealth preserver and should be a decent part of everyone's holdings.
I too see the potential challenges (catastrophes?) coming. I join you in wishing the ZH community well.
Who the hell is QB management and what have they done lately? in my view gold is going nowhere and will trade between 1,000 and 1,200 for the next 3 years.
Fiat currency is a representation of VIRTUAL gold. If currency is showing weakness it is because it is losing the qualities of gold. People ALWAYS want gold but will accept paper money only to the extent that maintains a semblance of gold's scarcity and value storage properties.
All fiat has lost this association with virtual gold.
This is the beginning of loss of full faith in USD, FRNs and will lead to use of other vehicles to "weather the storm".
Just as Gresham's law predicts gold is increasingly being hoarded and kept outside the "system", and currency being variously dumped or that which was stuffed in mattresses is being exchanged for AU.
The monetary system may fight this as it deems, even to confiscating gold, but they cannot win man's need to feel protected from depredation and excess mismanagement or fraud.
no "inflation play" but a "money play"?
but inflation is the inflation of money according to the italian economist von mises
and gold is historically money but no IS money unless is means 'has been'
but historically, a country could not wipe out the world, with the america and its bombs, america can say fuck off we blow up-a the world and your gold-a.
and what do the gold bugs say-a. you can't blow up the world just because you don't-a have real money...that's crazy.
hey, shut up you face because you say gold IS money...and that no crazy?
Did you leave your meds in the fridge before you left home tonight?
I believe he was scotish and his name was correctly spelled Macvonmises
Roubini is a keynesian, enough said.
You got that right. Keynesianism is to economics what astrology is to astronomy. And the world only awaits the (unfortunately cataclysmic) recognition thereof.
It's call a HyperDepression:
http://libertarianpapers.org/articles/2009/lp-1-32.pdf
Right now, in Zimbabwe they don't want paper currency at all but gold to purchase anything. .1 gram of gold buys you one loaf of bread.
So 10 loaves is one gram.
So 280 loaves is one ounce.
That's about 5 bucks a loaf at present gold prices, but you have to add in the scarcity of wheat and bread in general, so the price is about correct.
Gold. It's money.
-MobBarley
ps Mugabe, burn in hell.
311 loaves is one ounce as gold is weighted in troy onces...
It is realy simple and a no brainer. Paper money could be gamed,gold can not be gamed. (shamefully,not an owner of gold despit me knowing all the underlying fundementals)...
I encourage everyone I know to buy some gold.
Go for it! It is not hard, and you will feel so much better. Mmm, mmm, mmm!
Sadly, even gold can be gamed.
Paper gold;
Tungsten gold;
We live in a corrupt world, nothing can be trusted any more.
One day there will be an almighty power struggle -can't wait.
Paper and tungsten are not gold. You can't game physical gold, it is pure equity.
Bloomberg has another negative gold article... they're consistently biased against it... my question is why is that?
http://www.bloomberg.com/apps/news?pid=20601087&sid=arhlK7_y34Mg&pos=6
Uh, the analysis by QB is worthless.
If there is monetary de-basing why are commodities lower across the board? (down 40% since May 08?) Why are house prices, car prices, clothing prices, vacation prices similarly 10-50% lower since May 08?
I thought we were rampantly printing money?
There must be something else going on.
Further, IF gold acts like QB says... why was it down 60% from 1980 to 2002? During this period money supply and debt grew 10-fold.
Again, there must be something else going on.
Some silly comments on the board about how gold protects wealth over time. This is just NOT true. U.S. Gold prices have advanced by 4% annually since 1900 ($20/oz), about 1/3 of the stock market.
Price variances during booms and busts and rampant market manipulation create the fodder for posts like this. Keep on keepin' the faith, bro, until the veil is pulled back and there no longer remains a choice whether to believe or not.
Talk about a specious argument....
Ya, and in 1605 an acre of land on an adjusted basis today would be worth....who gives a rats ass
Everyone KNOWS gold is not the asset to hold over very long periods of time......it is for certain times..
As Tudoor Jones recently said, every investment class has its time, and gold's time is now...
Economy good - gold bad
Disinflation - gold bad
Some inflation - gold good
Deflation - gold good
Hyperinflation - gold fckn eh bubba!
eh hey bubba!
"why was it down 60% from 1980 to 2002?"
maybe central bank selling their gold holdings
maybe long liquidation after the 1980 top
then ABX and other producers hedging future production.
maybe psyops by the msm reinforcing the "barbaric relic" intellectual tripe
maybe gold banks leaseing and selling into a declining sideways market
Bre-X scandal drives investors from the mining stocks into the hands of the greenspan inspired tech bubble blowers.
After Bre-X I can imagine these smug bankers believing they had the gold bugs routed. gold declines to the low of 256.....................But then they started seriously screwing with the currency. Successive waves of wealth transfer from the many to the few.
happy?
why? 1980-2000 returns on stocks were better.
2001-2010 returns were worse $GOLD:$INDU http://stockcharts.com/h-sc/ui?s=$GOLD:$indu&p=W&en=&id=p66447955636
The real price of gold, not perfect but a good enough proxy. Other than the price of dollars this is the most important relationship, gold:commodities without a gold component.. .. $GOLD:$CCI chart http://stockcharts.com/h-sc/ui?s=$GOLD:$CCI&p=W&st=1980-12-16&id=p66447955636. 2004-2008 gold's real price was capped by strong commodities. GOLD:CCI is now sitting at a higher level than any point 2000-2008, good for the miners.
$GOLD:$SPX http://stockcharts.com/h-sc/ui?s=$GOLD:$spx&p=W&en=&id=p66447955636 Stage 1 2001-2005 Stage 2 2005-2008 ($1000) presently at the start of Stage 3, mildly hyperbolic so far. If we follow earlier primary indicators [yield curve for example] we'll peak in a few months then enter an 18 month volatility coil after which k-a-b-o-o-m
$GOLD:$GDX http://stockcharts.com/h-sc/ui?s=$GOLD:gdx&p=W&en=&id=p66447955636 from gold's high in this case in 2001 it's gone through one complete cycle, now decling again as of early 2009 same as 2001 to end 2003. I expect this trend to continue.
Argue with the markets all you like. All are 30 yr charts to show the full post-70s picture & magnitude of the change. Price is $1100 with virtually zero public participation. Last, propaganda doesn't work as well as it used to. Stage 3 should be several years long.
The above charts are charts, not TA.
Part of the game.
Greenspan let the bond vigilantes exert a lot of steering power and control of policy, which deluded them into thinking it could continue. Bernanke pulled out QE and monetization and snuffed 'em.
Clinton actually was able to show some budgetary surpluses during prime bubble years which encouraged investors that USA might be able to manage their affairs. Built confidence (falsely) in their securities.
Securitization paid fine profits during early ramp up of housing and the slick shills convinced investors that RE and homes were perpetual wealth creators. Then it unwound.
Gold was the same. It is deemed unnecessary during boom times of high confidence because it has no cash flow and little appreciation in good era.
It's all been a huge Ponzified scam; but suddenly people realize it.
AND the UK offloaded its bullion at the very bottom, so some saavy old world banking group are finessing gold to their advantage as well.
The soul of wit, and Truth, is brevity:
"Given the inconsistencies and apparent misunderstandings inherent in his arguments, we feel positioning assets based upon the logic in his report would be imprudent."
Wonderful, measured tone, succinct, true.
why we need to belive roubini when he is a big fraud false prophet
http://wallstcheatsheet.com/breaking-news/economy/is-nouriel-roubini-a-f...
http://www.youtube.com/watch?v=aUT9NsVZEPY
In a squeeze, if I were wealthy and wise enough to own a well-stocked and well-protected store of food and essential living supplies, I believe it unlikely that I would trade my wares for gold at the current rate of exchange.
Point well taken. But, reality can change what you believe now.
My grandfather owned a small grocery store in New York City during the first Great Depression. His customers were his family, friends and neighbors (mostly Ukranians). He did not trade his food for gold. His customers did not have gold. They were poor and unemployed. Their children were hungry. He extended them credit...how could he not? They were never able to pay him. He did lose his store. My father was always proud of his Pop.
Alas, that neighborhood/family/friends dynamic is (sadly) lacking in today's strip mall/suburbian sprawl landscape. It appears unlikely that you will be extending credit. Indeed, you appear to be waiting for a higher price and you think yourself wise.
OTOH, Bloomberg makes the case that CB buying gold means "it's time to sell":
http://www.bloomberg.com/apps/news?pid=20601087&sid=arhlK7_y34Mg&pos=6
JP and the Sunshine Banks must be sending up flares on those metal shorts.
Comex raised the margin requirements on gold tonight. and Bloomberg is running thinly disguised propaganda pieces.
Gold Buying by Central Banks Signals Sell as Past Haunts Future
http://www.bloomberg.com/apps/news?pid=20601087&sid=arhlK7_y34Mg&pos=5
LOL
"Comex raised the margin requirements on gold tonight"
the fuckers. there's been little volatility or volume and they raise margin requirements.. There will be some selloff as those who are forced to sell will be met with lower offers and increased naked shorting.
that said a buying opportunity presents itself. the best case will be side ways (and now down) untill late december when the first traders return and see their buy target was hit while they were in colorado or the hamptons or........
or maybe the chinese will buy everything that gets droped by the weak hands.
I was long on gold...all the way up until I saw a "news" story on CBS' propaganda site extolling the future upside to gold, and encouraging people to invest in the stuff. It was then that I knew the peak had been reached...at least for now. Be careful, people. It's a trap.
Disinformation, double-head fakes, triple reverse psychology...
These people just try to dominate an argument any way they can. Usually that means controlling both sides of the argument. Inflation! NO, DEFLATION!! No, Inflation!
Scary way to manage your affairs, idn't it?
I saw a black cat so I stayed home and hid under the bed.
I found a four leaf clover so I bet the kid's education money on a horse named "Dum Spit".
Blank screens need to channel programming from another's studio broadcast.
Your mind is the same.
Touche
but...
On the plus side, this insulates from the herd mentality favored by so many destined to be burned/ruined investors.
Moo for me, eh...
Discussing this at work today.Roubini is wrong, and this paper correctly points out why.
The people who say gold is bad seem to be the same ones who think that if everybody is positive about the economy, that will fix it.They exist in a delusional world where the notes from the federal reserve have an absolute positive value.In short, they are nuts.
I knew the trouble was very serious when I noticed the colorful new money fell apart in my pocket really quickly.I discussed this with some people who know a bit about the printed notes and we all agreed...the quality was down a lot.The old money could make several trips through the wash by accident and still be presentable.The new bills are crap.You don't have to be a financial wizard to see how ominous that is.
At this time in our history, gold looks like a solid buy and hold to me.
hey, why you buy-a the gold?
because-a the new money can't handle the rinse cycle
you so rich you leave money in the pockets?
it's-a the money you mamma makes-a for me on the streets
why you wise-a guy
The wealthy and the central banks of the world are accumulating precious metals. Esoterically, as we approach Christmas remember one of the gifts to the baby in the manger was gold and that Christ was betrayed for pieces of silver (11 ounces), as we approach Hannakah remember the Ark of the Covenant was made with gold and silver.
Ready for an epiphany? All paper wealth is an illusion and its size dwarfs physical assets - it is effective for social order and control. Google's market cap value is twice the value of all the gold mining companies. You could feel good knowing that you have $100 million digital dollars in a bank or brokerage, but if you lived in a modest house (owned or rented) and drove a decent car (leased or owned) you would be living as everyone else and there would be no difference except the ability or potential to spend and a mental distinction (Warren Buffet lives like this). In this case, the money they have in institutions is often used to make loans and increase the quality of life for others.
Remember with the national debt, as Mao Zedong stated "Political power grows out of the barrel of a gun". If China defaults on derivatives, the US defaults on their associated debt - finance is being used as a weapon. If China wanted to corner a specific commodity, the US would attempt to counteract that with treaties and deals with other countries or corporations to secure resources in the interest of national security. China is keeping all the gold they are mining in China and wanted to purchase the IMF gold. It looks to me that they are positioning SDR hard assets to countries in preparation for a new currency based on SDRs (India and the other countries accumulating). If gold was revalued to $100K per ounce, all the US debt would be easily covered by US gold assets.
Greenspan stated gold was the only protection against confiscation through inflation. In hollywood movies, is treasure depicted as paper notes (Goonies/National Treasure)? One of the problems of precious metals is valuation (it is not a perfect science), and we can take a look at various prices and their percentage increases I computed since 1913 in the table that follows. As a side note, housing prices were a bubble because the prices went up faster than wage increases (so compare the percentages across categories). In addition, the average income increase is somewhat misleading because now 42% of households are dual income - back in 1913 it wasn't that high. If we adjusted for assuming it was 10% in 1913 the avg income would only have increased by 2426% instead of the 3568% listed.
Notice that gold, a new house, and a new car have all increased in price by roughly the same percentage (5155% - 5706%) while CPI went up 2500%, gas went up 2192%, a loaf of bread went up 4650% (gold price using the loaf of bread would be roughly $1,000), and average household income went up 3568% although taxes are much higher now than then so disposable after tax income would be less. Based on the price of a loaf of bread, gold should not go lower than $1,000 assuming the price of bread does not decrease - this is the lower end of my gold price range.
When you consider the lack of investment opportunity costs due to bloated valuations, the unprecedented risks in the market, and the deflationary collapse of incredible paper asset values due to leverage, I believe there is significant upside to silver and gold - as the asset triangle collapses into portable assets that are accepted world wide, and gold has preserved purchasing power for 6000 years.
1913 Price // 2009 Price // % Change
CPI $0.04// $100.00// 2500%
Gold $20.67// $1,135.00// 5491%
Average Income //$1,296.00//$46,242.00//3568%
Loaf of Bread //$0.06//$2.79//4650%
Gallon of Gas//$0.12//$2.63//2192%
Gallon of milk//$0.36//$3.45//958%
New Car//$490.00//$27,958.00//5706%
New House//$3,395.00//$175,000.00//5155%
Dow Jones Index//78//10,500//13462%
Now, someone mentioned that the stock market has done better in appreciation over the years, HOWEVER, what most outsiders do not know is that companies are continuously being substituted in the index- so the losers that you may have purchased in the index are eliminated and replaced with winners. How many of the original companies still exist in the original DJIA? GE.
Gold - Yes, Silver - Yes, 6 months of food (cans of soup, water, jars of coconut oil, jars of raw honey)- Yes, survival gear - Yes, and portable solar panel (in case cap & trade is passed bills will go up and you can run your appliances off of it every day). Like the Boy Scouts, always be prepared and have a put option on the american dream, just in case. Hope for the best, plan for the worst.
if-a power comes through the barrel of a gun, then you buy a gun not gold. what's-a matter for you, you no listen to yourself.
As an investor you can have your cake and eat it too. Losers choose "either or" and think in binary choices, winners choose more of both. Perhaps you don't know the meaning of survival gear to eliminate koopa troopa (koopa troopa love your gold). Ask Pakistan or Iran what the source of political power is.
Yeah, because food items pre upton sinclair is the same as food now. And those model ts sure him like a cts. The crap we get today would be priceless in 1906.
But I dont buy "hard assets" anymore. Food, clothing, even shelter is a very small part of my spending.
Most of my spending is on services -- healthcare, entertainment, education, leisure, etc. One nice meal is a restaurant costs $300 or 3x my monthly gas bill.
So comparisions of "fiat currency to hard assets" are quite worthless.
Same with your price comparisions. 1Mhz Processor, 100MB storage computer was $40,000,000 in 1960. Today this is ~$40. This 1/1,000,000th of the price. My long-distance phone bill was regularly $200/mon in 1980 today I can call unlimited worldwide for around $40/mon. Not to mention quality improvements -- my car today is a little better than that 1913 model.
I suspect as the asset pyramid collapses into the physical, maslows heirarchy of needs will also collapse as people become poorer and those physical necessities become more important. Ask all of the unemployed about food and shelter and see if they care about the price.
My comparison was hard asset to hard asset in the case of gold. In the case of all the hard assets that are still used today they are very worthwhile. If I quoted horse buggies or computers they would be quite worthless, but I did not show computers or long distance phone bills. Generally speaking, technology is the most competitive and as a consumer I am happy to receive improving technology/features/speed while the prices have dropped.
If you actually looked at the percentages, you would notice that I wasn't just making a fiat is bad point - in fact we have done well on a few of the categories. There is a central bank measure that should consider quality of life and standard of living - but how do we measure this and where should we put our surplus wealth? For a basket of the necessities you can look at CPI growth compared to average income growth (after taxes of course).
The services you referenced that are your biggest spend are primarily discretionary spending - I don't think there is much use in looking at the changes in fun money over time.
QB is right to the extent that Gold has a monetary demand
NR is right to the extent that there is demand for Gold as an investment avenue or as an "asset class", alongwith other commodities. This creates the bubble nature periodically
Roubini is being primed for either treasury of fed.
Are nuclear weapons and delivery systems purchased with $US or gold?
Full faith and credit includes the barrel of a gun, nukes, and the gold in goldbug's panties that might be left over.
Hi kids,
Value; everyone here has read Gunga Din, right?
Under some circumstances, water is more valuable than ... well, gold. Under some circumstances Spam can be worth more than gold. It's really not so much value but playing the odds ...
Also, gold is not a currency. Nobody is buying gold to circulate and by so doing increase the worth of commerce. Gold it has much more commodity value than it does as an enabler of commerce. Consequently, gold cannot function as a currency.
Gold- backing of paper is simply more fiat. Gold backing has always been undone by arbitrage. Gresham's Law is still in force.
Well, gold has a value of $1000 an ounce! How many $1000 transactions do you make in a day?
Doesn't mean you don't ever make 'em, though, does it?
Gold and silver. Long-term and day-to-day trade, I do believe is how it used to work.
There is so much price suppression in gold that it is ridiculous. The increase in gold price doesn't mean gold has changed, it means fiat has changed, and thats why they have come up with all the ridiculous (Crimex, etc) tricks to suppress the price.
It has the nice side effect of boosting confidence in fiat, so yeah, why wouldn't they want to suppress the hell out of it?
we are early in the deflation game. The idiots on wall street are booking profits they will never cash. The fish went over the dam in the last flood and the lake don't have any in it, so they can't expect to get their bait back, much less the fish they were planning to reel in.
If I owned gold, which I don't, I would quit watching the price. It is kind of like buying a 44 magnum and watching police shows with the intent of shooting the TV. I am hoping gold comes back down, but if it doesn't, I have to die of something. When the next liquidty problem hits, which it will, gold should collapse in price. But, don't miss it if it does, as there isn't going to be much paper that you can depend on surviving this mess. I wouldn't worry about inflation. There won't be much. There could be a sudden straight to zero though.
hmmm... why everyone so sex up about gold? If you bullish pm - PT or PD is better, if you bullish commodities - grain, pork belly - better. If you bullish metal - nickel, and if you bullish energy - natgas... Gold is just other other trade... Who cares?
Gold is much more readily accepted as currency than either Palladium or Platinum. This is due to obvious historical reasons. Not so long ago, in historical terms, most national currencies could be exchanged for gold (or silver) bullion at any bank - no questions asked.
While the debate about the intrisic value of gold rages on, there is no doubt that, if the entire international economic system collapses, gold would be accepted for payment in practically any trading activity. See: Zimbabwe. Platinum may be accepted in some locales, but gold and silver would definitely have an edge here.
Since most people on ZH believe the sh*t is about to hit the fan, they stock on bullion (and many other necessities) just in case.
if sh*t about to hit the fan, then i would rather have MRE, Glock and M60... who need gold when you have M60...
Gold is not a commodity.
oh oh... almost everything is commodity, except human life, pussy and God...
You can buy a hit man in some countries for very cheap. I heard it was a bit more expensive in the USA, but still possible. On the other hand of the spectrum, you can buy kids in some countries for cheap. Google: Madonna, Malawi, Adoption for an example of this.
As far as pussy is concerned, open any "free" newspaper and look at the pages and pages of advertisement for escort girls, usually. In some cities, you can buy pussy just by going to the red light district. See also: Craig's list, erotic services.
And don't get me started on God, OK? Oral Roberts - Rest in pieces - defined what is now called "God Marketing", although I prefer to call it "God Salesmanship". The guy died a multimillionaire, peddling Jeebus to the uneducated. Not bad for something which is not a "commodity".
By the way, I am afraid we will see a lot more Oral Roberts in the near future. Poverty does that to a lot of people.
i concur! Pussy as asset class! What is price for Feb 10 pussy futures? is it physical settle or cash? How much is variation margin?
Yes and Pussy may think of you as a security.
I'll have your SPAM. I LOVE IT!!!
Bankers and politicians are trying out new ideas during this financial crisis, and they all appear to be using the same playbook in a coordinated fashion. Everyone is printing more money, yet deflation is a powerful force that would take over completely if the printing presses weren't in overdrive and if HFT, coupled with inept regulation, wasn't a primary technique of asset inflation.
The world has been in an inflationary spiral for a couple of decades due to excessive monetary creation, and Newton's Law of equal and opposite reaction must take place at some point. Governmental and central bank efforts are using the playbook of the past few years to fight the forces of implosion. This implosion comes from excessive debt that will never be repaid and from the extreme reluctance of people and business to borrow frivolously. The implosion is now in progress, it will continue regardless of governmental efforts that promote inflation. The only thing to debate is when the chain reaction will ignite and asset values will collapse.
The next 'creative' banker will jump on the deflation bandwagon. Just as Bernanke and other central bankers are using inflation as the cure all, the next innovator will notice that the only people benefiting from inflation are the 'fat cats'. Most everyday people are learning how to be frugal. Second level effects from inflation are killing them. Central bank driven inflation that pumps up asset prices is also robbing average people of income and savings and transferring it directly to wall street 'fat cats'. Since extended public benefits are required to support the unemployed, the 'fat cats' are also getting a direct drip from the Treasury due joblessness and high prices caused by asset inflation. Wall street has a piece of everything simply because of central bank sponsored inflation (and inept regulation over commodity speculation). The Mafia never had a street tax work this well.
The best way to aid in frugality is to lower prices, not inflate them. The next financial innovator will be a champion of deflation, not inflation. This innovator will attempt to explosively burst the bubble of the past couple of decades. Nobody can say exactly where the bottom will be, but I suspect it will be based on average historical purchasing power in relation to average historical incomes. As a result, gold will drop like a stone (pun intented). Oil, copper, natural gas, and other commodities will also drop.
Thus, the next big leg will be the big deflation. This will make everything affordable again. Gold will be a part of it. The big deflation won't happen until it becomes a populist movement. Right now, the fat cats are still running things. Perhaps this will be late 2010 at the earliest. It will take more pain in the world economy.
The big deflation will also create jobs, and probably lots of them. Once assets are fairly priced in relation to their real value, people with money will feel safe to invest in the economy again. Money needs to flow somewhere and seek a return. If inflation profits are not available, then real profits are the only other alternative.
Before the big deflation, I would not at all be surprised to see another big bout of quantitave easing in 2010. Rising stocks are the new opium of the people. They will create no new employment on Main Street, but will serve as an excellent distraction for those who confuse prosperity with asset inflation. 2010 bonuses also need to be funded. The wall street sales machine will go full tilt into whatever pitch works best. The big deflation will probably have to wait for this.
Here is all you need to know about the price of Gold.
http://www.thedailyshow.com/watch/thu-december-10-2009/beck---not-so-mel...
Here is all you need know about Gold
http://www.thedailyshow.com/watch/thu-december-10-2009/beck---not-so-mel...
I agree with Rubini. What purpose does Gold have? If nine people had Gold and one person had Spam, how much would the Spam be worth? If I was the only one with Spam I would not trade it for Gold, but I would trade it for something like Grain. The Gold would do me no good if there was a food shortage.
Plus,if I was hungry, I could eat the spam, not the Gold. If I had a lot of Spam and wanted Grain, I could trade my Spam for Grain.
To prepair for a Monitaty Collapse I would have the following:
A House Generator fueled by Propaine Gas. I have a Well and would need to be able to pump water from the well.
A Wood Stove.
A Gas generated Chain Saw. Plus, about 3 extra chains. 10 bottles of 2&1 Oil and Gasoline.
A Water Purification system.
A Gun with plenty of bullets. Not only for protection but to kill game to eat (birds, squirls, deer).
Seeds.
Plenty of canned goods and Coffee. To eat or trade.
These are items that you can use every day even if the World does not come to an end. Much more valuable than Gold. Especially in a Crisis.
+1.. or just get M60... you can get everything you need with M60! its great tool in good hands!
From the report, surprised no one picked this up:
To display “bubble-like” characteristics, gold would need to trade at a meaningful premium to the SGP, as it did at its speculative peak in 1980. At current levels, that price is multiples of the current spot price of gold. In fact, spot gold currently trades at approximately an 85% discount to the SGP
Spot at 85% discount to SGP means their SGP (shadow gold price) is about $7400.00; a meaningful premium to SGP (obviously when to sell, if one can time it correctly) puts peak price above $10K. That wouldn't surprise me at all; five-digit gold is IMO easily possible before this crisis is truly over.
Thanks for the link, based on the bread analogy its price should be $1,000 and based on SGP its price should be $7,400 - it looks to me like an excellent investment with limited downside.
Understand the capital flows between countries and the pooling of capital because the people with essential commodities (Middle East with oil) value gold and the people with the lowest labor cost base is the largest exporter (China) - culturally they both love gold.
Many of the people that speak negative of gold have never held a bar in their hands or lack any historical reference point. I call them pavlov dogs because the only reason the dollar was valued related to the gold in fort knox backing that up - food & the bell are gold and the dollar in this analogy. Once the gold/food was removed, Pavlovs dogs kept salivating thinking they had gold/food when all they had was a bell/dollar.
Many of those seeking to fight the ascendancy of gold have a vested interest in the status quo system because they are somehow benefiting, regardless of capital allocation being corrupt. I hear the moronic argument that gold is not a gun and you can't eat gold, but those are arguments from imbeciles locked into a false either or mentality brainwashed by a left/right good/bad paradigm. You can indeed have food, guns, gold, cars, homes, ipods, and other investments all at the same time - diversify your portfolio.
What is the dollar? Is it an asset? Is it a liability? What is its value? True value is not what someone says it is, it is what it is worth to you based on your wants and needs - take that to the bank. For those with "insurance" in companies like AIG, I would choose gold any day as an insurance policy. One thing is for sure, the US dollar has lost 96% of its value since 1913.
They should increase the value of gold (asset to cover debt) and let deflation take root for a short period to stimulate consumer confidence at a safer level to buy in/invest since we're not buying into the recovery nonsense. But they have chosen to print faster while extending and pretending and we will have a Japan scenario or default through money printing since there aren't enough taxes to recover or government spending to cut to pay off our debts (interest is becoming more difficult to pay off - although at 0 interest we could play this game forever). They may want to destroy the dollar to bring in a new currency under their complete control especially with the pressure on the fed (IMF/World Bank).
Right now we have 2 companies left that have a triple A rating, and all ratings are biased to the upside as we have seen. Sovereign debt is not sustainable, Wal-Mart would have a better default risk than most sovereigns and it has a diversified currency exposure - and they have a military (all our corporations interests are protected by the US military).
When the skies are dark, gold still shines.
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Alena
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