This page has been archived and commenting is disabled.

Roubini Turns Bearish On Gold (Again), Suggests Taking Profits And Buying Puts... Much Like He Did In December 2009

Tyler Durden's picture


Rouibini has never been much of a fan of gold. Which is why we were not too surprised when we read RGE's latest recommendation on the precious metal, which, as expected was to take profits. Doctor Realist says: "September may be a good month to take partial or full profits for an
investor with a long gold position. Alternatively an interested investor
could buy December put options." Of course, had RGE clients followed the good Doctor's advice back from December 2009, there would have been no profits to be had. To wit: "Investors should thus be wary of getting the gold bug and being stuck with this barbarous relic. The recent swings in gold price—up 10 percent one month, down 10 percent the next—prove  the point that gold has little intrinsic value and that most of its price movements are based on beliefs and bubbles. As an insurance policy against the tail risk of eventual inflation, it may be useful to hold a small amount of gold in one’s portfolio, but stocking up portfolios with a fiat currency that has marginal practical use, a zero nominal interest rate, high storage costs, and the price of which is subject to volatile whims and bubbles is totally irrational. If you want to hedge against inflation, stock up on Spam or other canned food or buy futures on commodities that have more physical uses and consumer demand....Unlike other commodities, it has little intrinsic value. Much like a fiat currency, gold’s value is based largely on the irrational beliefs of investors. In a depression or near depression, one would be better off stockpiling canned food and other commodities like oil that are useful for riding out Armageddon. You cannot eat gold or burn gold." Ah yes, the good ole "can't eat gold" argument. Yet somehow, despite gold's indigestible qualities, it is precisely gold which today hit an all time high once again, despite RGE's December note and a chorus of other infidels screaming for gold's metaphoric blood. We expect to hear ever more pundits to attempt to top tick the market. Will they succeed? Sure, if the starting sample is a few thousand, one will always be spot on. Pure statistics.

From RGE: There's Something about September

Gold’s Seasonal Characteristics

As gold prices continue to rise, September’s reputation as gold’s favorite month remains intact. Is this coincidence? No—in fact seasonality has its place in the commodity sector beyond agriculture (planting vs. harvest) and energy (heating vs. cooling & driving).
The market reached a record high to US$1276.50/ounce on September 14, 2010. US Dollar/Yen, fell to a 15 year low before the Japanese Ministry of Finance intervened. That slide also contributed to the rally.

The price of gold is headed for its 10th straight annual gain, and is up 16% so far this year. We are only half way through the month and the metal has rallied over 2.3% so far.

Since 1975, September has been the best month for gold in terms of its month-over-month price appreciation. On average, gold in September has appreciated 2.60% above its August price during this period. Of the 34 years in this study, gold has risen month-over-month 23 times in September.

  • India—the largest global gold consumer—develops a voracious appetite for the metal beginning in September and extending to the beginning of the following year. September marks the beginning of the Indian wedding season and the start of preparation for Diwali, one of the country’s most important holidays, which typically falls in October or November.
  • Jewelry makers begin restocking inventories in advance of the Christmas shopping season, particularly in the U.S. and to a lesser extent by Europe (typically driven by Italy although this year may be an exception here).
  • China is the world’s 2nd largest consumer. The Chinese step up gold purchases in preparation for the week-long National Day celebration that begins October 1, and the Chinese New Year occurring soon in the new Roman calendar year.
    RGE View:

While the above demand drivers stem from the physical markets, the financial markets for the last few years have been the true price driver. The price of gold continues to appreciate predominantly due to its safe haven characteristics. Recent investor doubts regarding fiat currency made gold an attractive asset, in addition to its characteristic of being a “no default” risk investment. Gold has no counterparty risk, making it one of the few assets left in the world without an attached liability. Yet gold tends to perform well in fat tail events, such as depression/severe deflation or actual/anticipated inflation. While we believe there is still upside potential to gold, we feel it is limited. While the global economy currently fluctuates between these two fat tails, we see upside limited to US$ 1300-1350/ounce (both fundamentally and technically) for the balance of the year, barring an extreme event moving us into fat tail territory. On the downside, US$ 1150/ounce is our target.


September may be a good month to take partial or full profits for an investor with a long gold position. Alternatively an interested investor could buy December put options. December is the second best month for gold, having risen month-on-month on average 2.18% in the period under study. Gold volatility, while not cheap, has come off a few percentage points from July, and has good potential to rise again toward the end of the year.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 09/16/2010 - 16:05 | 586113 Duck
Duck's picture

Listen to Roubini's opinions on the economy.

Don't listen to him on the market.

Stick to what you know.

Thu, 09/16/2010 - 16:31 | 586198 cbaba
cbaba's picture


Before the crash of September 2008, he was extremely good predicting the crash, he defined 12 steps to financial meltdown.

But later on something happened, he softened his voice, like someone from the government/FBI told him, if he doesn't support the economic outlook of this government and give bullish comments on economy and support the dollar we will kill you ?

I guess he is scared somehow and his tone is changed ...

I never read him anymore... i know that he will say something stupid like Gold will crash... i am not surprised..

For me he is possessed by the Goblin in Chief and his squid team .


Thu, 09/16/2010 - 16:36 | 586214 silvertrain
silvertrain's picture

Exactly!! He is playing the part of a schill spouting this off..

Thu, 09/16/2010 - 18:01 | 586469 Testicular Cancer
Testicular Cancer's picture

Anybody see Johnny Bravo other than on the side of a milk carton?

Thu, 09/16/2010 - 18:25 | 586538 Getagrip
Getagrip's picture

Let it go...

Thu, 09/16/2010 - 18:19 | 586522 Getagrip
Getagrip's picture

He's been bought. Spot on...

Thu, 09/16/2010 - 17:05 | 586304 SheepDog-One
SheepDog-One's picture

Roubini was 'corrected' by the appropriate people a couple years ago.

Thu, 09/16/2010 - 17:30 | 586384 Oracle of Kypseli
Oracle of Kypseli's picture

Here is my take:

Gold will temporarily go down so that the "ruling class" can reload:

Tomorrow is the smack down.

Thu, 09/16/2010 - 18:24 | 586534 Getagrip
Getagrip's picture

Buy farm land as you don't want to be in the city when ugly turns to rage...

Thu, 09/16/2010 - 18:42 | 586582 Oracle of Kypseli
Oracle of Kypseli's picture

Already done in 08. Peruvian Andes next to fresh water spring.  

Thu, 09/16/2010 - 22:12 | 586993 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1,000,000 Oracle!

As long as you get along well with your neighbors...

We have a business in Lima, no farmland though.  Gets bad here it would be bad in Peru too.  But, if we chose to go, we have lots of (her) family and we could live like Kings down there.

Thu, 09/16/2010 - 20:10 | 586777 Hephasteus
Hephasteus's picture

That's not very reasonable. Since there wasn't enough gold released on market from Japan. I'd look for gold to get close to 1280 tomorrow morning. Then without enough gold to work the transfers. I'd watch  platinum and silver. When silver busts 21 and platinum busts 1720 the pressure on gold will become too intense and it should start jumping up big time. It just has to take out the support of it's cousins. Which platiunum can't take much pressure off because it's not 100 to 1 leveraged. If it spikes up to 2150 in october it's game over. It went from 1500 to 2250 in a matter of DAYS on last liquidity crunch.


Thu, 09/16/2010 - 17:40 | 586408 midtowng
midtowng's picture

Roubini's advice doesn't match his own chart. Looking at his chart you should buy gold in August and sell in December, not September. Why is he giving advice that his own charts disagree with?

Thu, 09/16/2010 - 20:06 | 586769 -1Delta
-1Delta's picture

Speaking of opinions, J Bravo, said he would not come back if Gold broke out....


I hate to say it, but i miss the guy....


Oh well...

Thu, 09/16/2010 - 21:25 | 586912 RockyRacoon
RockyRacoon's picture

Count your blessings and move on.  He's not missed by many.

Thu, 09/16/2010 - 16:05 | 586115 centerline
centerline's picture

Just got an email from an unknown company selling gold, silver, etc.  Bad omen here from a contrarian standpoint - in terms of short-term movements at least.

Thu, 09/16/2010 - 16:16 | 586152 goldmiddelfinger
Thu, 09/16/2010 - 16:28 | 586185 truont
truont's picture

It will get worse. 

Soon, everyone you know will be into gold stocks.

It will be like the internet stocks in the 1990s.

People will climb over each other pushing valuations higher and higher...

That is when you sell your PMs.  This bubble is just starting to inflate.

Thu, 09/16/2010 - 16:30 | 586196 goldmiddelfinger
goldmiddelfinger's picture

That was 1978's bubble fool. Been there done that. Ya might see if Bunky Hunt has some internet stocks fer sale.

Thu, 09/16/2010 - 16:40 | 586228 silvertrain
silvertrain's picture

 Gold is no yahoo im afraid, and when folks think it may be done, it will kick into yet another gear..Getting out of pm's at or near the top will be a feat like no other to try and time...

Thu, 09/16/2010 - 16:49 | 586256 Treeplanter
Treeplanter's picture

I don't think soon.  I think part of the professional investor class will load up.  Ma and Pa Investor know that something is way wrong, that big trouble is coming, but they will take more time to figure out what they want to do about it.  This is ground floor time, when people are put off by negative comments like Roubini's while those who get it get in fairly early.  This is a much longer ride than the bubble.  That was yuppie fever.  We are in a different ball game now.

Thu, 09/16/2010 - 20:04 | 586762 Rainman
Rainman's picture

...funny, that term : " we are in a different ball game now ". Heard it over and over from two formerly wealthy friends a decade ago who were deep into the dotcom scam.

Gold phys has been a part of my portfolio for over two decades. It is in my top 5 best investment categories for that period. Do I wish I owned more ?? YES. Is it in a bubble now ?? YES. Have I sold some recently ?? YES ( book profit and buy back cheaper later ). This is all that Rouibini is saying.

If it walks and quacks like a deflation-contrary bubble, then it's a ......... or it's a fear hedge that needs to work despite a firestorm of international manipulation to bring it down . The first rule in investing is " don't be greedy ". The second is " don't underestimate the enemy ". And you need to be real damn sure you're right when you come in big at what looks like a top .   

Fri, 09/17/2010 - 11:14 | 586840 kathy.chamberli...'s picture


Thu, 09/16/2010 - 17:03 | 586294 SheepDog-One
SheepDog-One's picture

Here Ive seen people going door to door buying gold and silver, from destitute retirees inside these homes I assume.

Fri, 09/17/2010 - 01:27 | 587235 Temporalist
Temporalist's picture

Trying to get every last scrap from the ignorant.

Thu, 09/16/2010 - 17:04 | 586298 Double down
Double down's picture

One cannot trust contrarian indicators anymore. 

How many of these indicators told us not to buy in March 2009?  These indicators assume a normalcy to the market that from my view point no longer exists.  TI believe these indicators represent structural changes and not buy or sell signals.  That is a very different message. 


Fri, 09/17/2010 - 01:28 | 587236 Temporalist
Temporalist's picture

The only way to be contrarian is to not listen to anyone but yourself.

Thu, 09/16/2010 - 16:09 | 586124 Chump
Thu, 09/16/2010 - 16:14 | 586146 theworldisnotenough
theworldisnotenough's picture

It is a potential headache for buyers of gold. In the name of protecting the stupid we will get a more tightly regulated gold market.


Thu, 09/16/2010 - 16:35 | 586212 goldmiddelfinger
goldmiddelfinger's picture

Weiner and Waxman? Tell me it's a gay band.

Thu, 09/16/2010 - 18:49 | 586594 UncleFester
UncleFester's picture


Thu, 09/16/2010 - 21:28 | 586918 RockyRacoon
RockyRacoon's picture

Weiner and Waxman  -- great band.  Barney blows the sax.

Thu, 09/16/2010 - 22:18 | 586998 DoChenRollingBearing
DoChenRollingBearing's picture

^----  LOL, guys!  I needed the laughs, thanks!

Thu, 09/16/2010 - 16:33 | 586206 truont
truont's picture

Instead of regulating the private gold companies, why doesn't Congress regulate the private Federal Reserve, and tell them to STOP monetizing the debt!  No one would even buy gold if the FED wasn't printing money like mad, and forcing bond yeilds to negative real interest rates.

Oh, yeah, that's right.  CONgress wants Bennie to monetize the debt....

Thu, 09/16/2010 - 19:45 | 586717 Frank Owen
Frank Owen's picture

"CONgress wants Bennie to monetize the debt...."
and there lies the irony of the audit the fed/ return to article 1 section 8 of the constitution argument.

Thu, 09/16/2010 - 21:29 | 586920 RockyRacoon
RockyRacoon's picture

They are treating the symptoms, not the disease.  Nothing unusual there for either Congress or the Fed.

Thu, 09/16/2010 - 17:00 | 586289 ZackLo
ZackLo's picture

Weiner and Waxman trying to fuck the gold bugs, maybe they will bring up something important during the hearing like maybe HR 4248 but I doubt it...

Thu, 09/16/2010 - 16:09 | 586126 GoldSilverDoc
GoldSilverDoc's picture

Long term:  buy gold. Take delivery.  Don't sell.  Live on something else.

Short term:  play the lottery.

Thu, 09/16/2010 - 16:09 | 586128 Sudden Debt
Sudden Debt's picture

The price of gold would be a lot lower if it was concentrated in big vaults.

But now a lot of gold is distributed in comon people's vaults and are nearly untraceable.

They don't sell it that easy, makeing demand higher then the supply. And as we continue in time the remaining gold gets more scattered causing...

a much higher price.


Thu, 09/16/2010 - 16:22 | 586173 Dr. No
Dr. No's picture

Agreed.  Gold in big vaults allow the owners to sell paper certificates agains the vault contents and/or lease it out.  This results in fractional reserve gold banking....

Thu, 09/16/2010 - 16:26 | 586181 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

It "is" concentraded in big vaults, "Knox", known and otherwise....

Thu, 09/16/2010 - 16:30 | 586191 Dr. No
Dr. No's picture

There you go again!  lol!  You make me laugh with your sarcastic statements about gold being in Fort Knox and/or the Fed reserve of new york...

Thu, 09/16/2010 - 16:32 | 586203 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Yeah but I said "is" and "Knox".  Clear enough???

Thu, 09/16/2010 - 16:33 | 586207 Dr. No
Dr. No's picture


Thu, 09/16/2010 - 16:09 | 586129 Stuart
Stuart's picture

When it comes to bullion, Roubini knows shit, but he does has alot of company.


Thu, 09/16/2010 - 21:31 | 586922 RockyRacoon
RockyRacoon's picture

He certainly do, Stu.

Thu, 09/16/2010 - 16:19 | 586134 Pladizow
Pladizow's picture

Shhhhh, don't argue with the good doctor or anyone else with this view.

Allow them to continue to spread this message far and wide, to any and everyone that will listen.

In the mean time: I'll continue to accumulate.

He's not even that bearish, his downside is 10% and at the same time he thinks we have a 40% chance of a double dip.

He is being quite contradictory. If we have this MSM double dip, will the price of gold fall? - I think not.

If there is this fictitious double dip, by what percent does he feel equities will fall?

Thu, 09/16/2010 - 17:14 | 586337 Monetize Me Captain
Monetize Me Captain's picture

Agreed. Let all the mistaken money managers sell their gold, I'll be the one buying. Just give me one good dip to buy on, please.

Thu, 09/16/2010 - 17:15 | 586342 Monetize Me Captain
Monetize Me Captain's picture

Agreed. Let all the mistaken money managers sell their gold, I'll be the one buying. Just give me one good dip to buy on, please.

Thu, 09/16/2010 - 16:11 | 586135 theworldisnotenough
theworldisnotenough's picture

Where is the intervention? I was hoping for a $20 drop to cover my shipping costs.

Thu, 09/16/2010 - 16:52 | 586260 Treeplanter
Treeplanter's picture

This sideways action is evidence of them holding the price down, while unable to push it lower.  The short squeeze of hard to find real metal is in play and the word it getting around to those who get it.

Thu, 09/16/2010 - 16:58 | 586280 Treeplanter
Treeplanter's picture

This sideways action is evidence of the cartel holding the price down, while unable to push it lower.  The short squeeze coming from hard to find real metal is in play and the word is getting around to those who get it.  There is a lot of money in the world looking for a good home.  They put off buying gold til later, but they know they will eventually.  When they see the odds are against the kind of pull backs they are used to seeing, they will act.  Be in position with your favorite miners.  We may have a few more dollars to go in silver before it takes a break.   

Thu, 09/16/2010 - 16:11 | 586136 JonNadler
JonNadler's picture

You can't eat gold?


He stole that line from me

Thu, 09/16/2010 - 16:20 | 586165 Overpowered By Funk
Overpowered By Funk's picture

But you can eat with gold - check out the grill on Flava Flav.-65

Thu, 09/16/2010 - 16:16 | 586138 TheGreatPonzi
TheGreatPonzi's picture

Who is this Roubini?

This is not because he's the only bear on CNBC that we need to listen to this liberal douchebag.

Being bear is not an heroic exploit.

Thu, 09/16/2010 - 16:16 | 586140 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

He has no understanding of the system.  He is just like any other economist that runs numbers through systems which are manipulated by only opinions.  While opinions may be important, as ideas are as close as we can get to truth, while considering the facts, the fact is gold is monie, and nothing less, and this must be considered while evaluating the current system.  The monetary system IS based on gold, this why Central Banks hold only it as collateral.  It may soon be joined by silver and platinum, people hold value in commodities, but at the end of every day, gold backs the system.  Gold's value has relation due to the value of its liquidity (It is fully liquid) and its rarity (it is very rare).  Right now, a liquid means of value is of the utmost importance.  Really, gold's value is priceless, at least, once oil enters its back side of production, which may have already happened.  Before this happens, people better get on it, otherwise and once again retrieving it by hand will be the most cost effective way of retrieving it for many.  Then its rare value will multiply hugely.  That will mark the second run for the gold bull, one that should last the coming decade.

Thu, 09/16/2010 - 18:26 | 586403 kathy.chamberli...'s picture

damn, i just broke my new fishing rod spinner, and haven't even gotten it wet. does anyone know how to bring the line out of the reel?

Fri, 09/17/2010 - 04:56 | 587328 VeloSpade
VeloSpade's picture

Just start putting out more often, to any man that comes along.  Then things may really start happening for you, instead of to you.  Now go clean up your tackle box and go fish for some rod.

Thu, 09/16/2010 - 16:13 | 586141 chet
chet's picture

Silver, assholes!

Thu, 09/16/2010 - 16:19 | 586159 Ragnarok
Ragnarok's picture



Thu, 09/16/2010 - 21:40 | 586933 RockyRacoon
RockyRacoon's picture

Barney agrees, without the comma.

Thu, 09/16/2010 - 16:15 | 586143 AR15AU
AR15AU's picture

Gold is now a fiat currency with no intrinsic value... What? Who honestly believes this shit.

And yes, having a requirement that financial instruments be edible is a sure sign of quackery..

Thu, 09/16/2010 - 16:21 | 586170 Silver Bullet
Silver Bullet's picture

Way to take what Roubini said out of context.

You all know what he meant

Thu, 09/16/2010 - 21:42 | 586939 RockyRacoon
RockyRacoon's picture

Paper currency has never had an intrinsic value.

An intrinsic theory of value (also called theory of objective value) is any theory of value in economics which holds that the value of an object, good or service, is intrinsic or contained in the item itself. Most such theories look to the process of producing an item, and the costs involved in that process, as a measure of the item's intrinsic value.

...other than kindling that is.

Thu, 09/16/2010 - 16:14 | 586144 SilverIsKing
SilverIsKing's picture

Can you eat FRNs?

Thu, 09/16/2010 - 16:19 | 586157 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Nutritional value equal to spam, highly suggested by No-Re'AL?

Thu, 09/16/2010 - 17:01 | 586290 Treeplanter
Treeplanter's picture

Hey, Roubini, let's see you eat some Spam.  I'm stocking up on cans of Red Salmon.  Keep the Spam.

Thu, 09/16/2010 - 16:15 | 586150 Thunder Dome
Thunder Dome's picture


Thu, 09/16/2010 - 16:30 | 586197 Ripped Chunk
Ripped Chunk's picture

And store it in your own silo or co-mingle it in a public or co-op silo   ????????????????

Thu, 09/16/2010 - 21:46 | 586946 RockyRacoon
RockyRacoon's picture

Yes!  And I shall sell shares of the commodity.  Of course, all people will not redeem their shares all at once so I shall be safe from a run on my silo.

Thu, 09/16/2010 - 16:17 | 586153 duncecap rack
duncecap rack's picture

I think equities are going to get whacked next week when the fed does not announce QE2. If they get whacked hard enough gold might suffer as people sell it to cover their equity losses.

Thu, 09/16/2010 - 19:03 | 586631 boiow
boiow's picture

thinking the same thing. will sell tuesday morning unless i see or hear otherwise. buying farmland next friday and need the cash.

Thu, 09/16/2010 - 16:17 | 586154 goldmiddelfinger
goldmiddelfinger's picture

The Obama Adminstration must seize all gold held by the public!

Thu, 09/16/2010 - 16:30 | 586193 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The same inept gubmit that flubbed Katrina is going to bypass the arms of Americans to seize rocks that most likely are hidden?

Thu, 09/16/2010 - 16:31 | 586200 goldmiddelfinger
goldmiddelfinger's picture

Yes sir. Just like thay did in 1935

Thu, 09/16/2010 - 16:37 | 586213 GoldSilverDoc
GoldSilverDoc's picture

Ho ho ho!  They sure did get all that gold in 1935!  Which is why, of course, so much was around as "numismatic" coins some 40ish years later.  Oh yeah.

Anybody want to guess just exactly HOW MUCH gold was turned in to the gubmint after the "confiscation" began?  Hmmm????

Thu, 09/16/2010 - 16:39 | 586225 goldmiddelfinger
goldmiddelfinger's picture

Success in the govymint biz is a relative concept. Ever heard of price controls?

Thu, 09/16/2010 - 21:49 | 586951 RockyRacoon
RockyRacoon's picture

I hesitate to post the entire article, but David Ganz has a nice treatment of the last gold confiscation, and the possibilities of another one.   Ganz is an attorney and is well known by any coin collector and has been in the business all his life.  I am a coin dealer as well so I have to stay on top of this topic.  Below are a few excerpts from his article which appeared in Numismatic News on Sept 9th, as well as a link to the original.

A Florida reader has asked about whether possible gold  seizure actions by the U.S. government, which some say is in the offing, make out a case for investing in gold coins of foreign countries, and asks as an ancillary question whether or not those who strongly believe in gold ought to consider holding some (or all) of their gold outside the United States. one who is contemplating this has shown me the text of the proposed Presidential Finding and Declaration that would be most likely to be necessary in order to force the surrender of bullion, hallmarked items and coins. But I can guess what it will have to say (“national emergency”) and several other key lines of verbiage based on past action.

Just how successful the program of turning in gold was has not been fully explored. I took my collection of Mint reports that go back to 1867 and put a spreadsheet together. See the chart below.

Here’s what these statistics mean: the government’s “voluntary” gold coin retirement program actually took in and melted 125 million gold coins of 351 million gold coins ever produced by the United States from 1795-1933. That constitutes melting 39 percent of all the double eagles struck, 47 percent of all the $10 coins manufactured, and about a third of the $5 gold coins that were produced by the U.S. Mints. Most of this took place 1933-1939 under the “voluntary” recall.

Quite besides the $1 to $20 gold pieces melted, foreign gold coin was also turned in. According to the 1934 Mint report, between 1870 and 1934, the U.S. was a net exporter of gold coin to the extent of about $1,651 million ($1.6 billion, valued at $35 an ounce (or about 45.7 million troy ounces of gold.

However, saved from the melting pot were collector coins. During the 1933 gold recall, citizens were permitted to retain “rare and unusual coin,” as much because the constitution prohibits a taking without just compensation, as because even in 1934, coin collectors and the general public understood that coins had a value that exceed face value or metal content.

The coins that were ultimately declared “collectible” were all U.S. gold coins made prior to 1933; later, all foreign gold coins minted before 1960 were in the equation. Specifically, the law and regulations allowed up to five of each date and mintmark to be held.

That is, for a $20 gold piece, $100 face value in gold coin for each date and mintmark. There are over 190 double eagles and that would allow a collector to acquire 950 gold double eagles at a minimum), which amounts to about 919 ounces of gold worth at current gold price (about $1.1 million). The $10 gold coin set has over 336 eagles in it or about 1,680 coins.

In context, the value at melt is about 806 troy ounces or another $967,000. What the heck: the $5 gold piece collection has over 225 dates and mintmarks from 1839 to 1908, alone (1,125 coins) (another 288 ounces, or about $345,000).

Completely forgetting numismatic value, the gold content of that collection alone would be around $2.5 million (and we haven’t gotten to quarter eagles yet). That should be enough to shield most people from seizure of their gold assets.

There follows a chart showing the makeup of a nice, safe gold holding.  In many cases the collector premiums are very small -- and besides, collecting coins is fun!

Thu, 09/16/2010 - 16:54 | 586222 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The times of 1935 was way way way different.  First, any paranoia of confiscation would include guns, and then once the FEMA officers tried going door to door they would meet way more gun owners screaming at them then gold owners (there are not many gold owners, in comparison to gun owners no matter).  There would be such an adamant uprising against this blatant search and seizure act that it may ignite a revolution.  The "Powers" that be, or whatever elite status you wish to bestow on them, know this and would rather crash cuurentseas and usher in a world that they can manipulate via entertainment.  The bully NEVER wishes to face the protagonist; the reason a bully is such is due to cowardliness.  They may run scare tactics and beta tests on gold owners, but they will never be able to sieze it in a cost effective manner.

Thu, 09/16/2010 - 18:15 | 586509 MachoMan
MachoMan's picture

You don't go door to door without a search warrant.  However, you do send agents to open every bank lock box, open/confiscate packages that are unusually heavy, make a visit to gold vaults (agreements with other banks/valuts to hold the gold; see what has happened w/ deposits in foreign banks by american citizens), and incredibly scrutinize personal contents associated with persons leaving the border...  you can pick up quite a bit this way.

Thu, 09/16/2010 - 17:04 | 586297 Treeplanter
Treeplanter's picture

The Obama Regime will soon be toothless.  Even yoyos like Letterman are mocking him. FDR had enough public support to get away with his garbage for many years.  The Loser in Chief blew that support in 18 months.

Thu, 09/16/2010 - 18:59 | 586613 The 22nd Prime
The 22nd Prime's picture

As evidenced once again by the pick of Elizabeth Warren as consumer watchdog. Another statist picked by team zero within a week of El Presidente himself admitting defeat and now promoting free enterprise as the solution to their, uh, commie problem. Oh the irony.

Castro folds, Obama doubles down. It’s starting to get interesting.

Booyah on Tuesday's primary!! Booyah on gold!!

A nice poke in the eye for Washington and the Fed.

Thu, 09/16/2010 - 16:18 | 586155 truont
truont's picture

Should we listen to Roubini or the Maestro himself?

 “Fiat money has no place to go but gold,” Greenspan told the Council on Foreign Relations. 

Mr. Greenspan replied that he’d thought a lot about gold prices over the years and decided the supply and demand explanations treating gold like other commodities “simply don’t pan out,” as Mr. Malpass characterized Mr. Greenspan. “He’d concluded that gold is simply different,” Mr. Malpass wrote. At one point Mr. Greenspan spoke of how, during World War II, the Allies going into North Africa found gold was insisted on in the payment of bribes.* Said the former Fed chairman: “If all currencies are moving up or down together, the question is: relative to what? Gold is the canary in the coal mine. It signals problems with respect to currency markets. Central banks should pay attention to it.”

Thu, 09/16/2010 - 16:22 | 586172 Pladizow
Pladizow's picture

In 1966, Greenspan wrote - "Gold & Economic Freedom are Inseperable."

Thu, 09/16/2010 - 16:18 | 586156 carbonmutant
Thu, 09/16/2010 - 16:31 | 586174 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Ultimate means final and obviously it will be the last one, as what else is there now to make monies.

Thu, 09/16/2010 - 17:06 | 586305 Treeplanter
Treeplanter's picture

Ultimate sounds even bigger than Mother of All...Whatever.

Fri, 09/17/2010 - 11:53 | 587956 Anton LaVey
Anton LaVey's picture

Good. If it's in a bubble, especially "the ultimate bubble" (whatever that means), that means it still has a long long way to go, and that it's probably cheaply valued right now.

Ergo: buy some more physical!

Thu, 09/16/2010 - 16:20 | 586163 What_Me_Worry
What_Me_Worry's picture

Ah, the neutered bear got his memo from the matrix.  Something tells me this man has received some generous "grants" from the system since he became so well-known.

I love when these guys say there is an x% chance of a double dip.  They are such geniuses that they can pinpoint the risk into a 10% range.

To the typical CNBC listener, this is probably the only bear they really know of.

Thu, 09/16/2010 - 16:24 | 586164 bob_dabolina
bob_dabolina's picture

You can eat gold.

So let's put that argument to bed.

I don't think you can eat dollars, I guess their intrinsic value is that they do burn and can keep you warm.

Thu, 09/16/2010 - 16:25 | 586179 goldmiddelfinger
goldmiddelfinger's picture

But its tough to flush...



Stranded on the toilet bowl

What do you? do when you're stranded

And you need another roll?

To prove you're a man

You must wipe it with your hand

And you won't be stranded any more.

bum bum

Thu, 09/16/2010 - 16:50 | 586258's picture

What are you, a savage?

Are you stranded at home? Just hit the shower.

Stranded at a public stall? Just sacrifice a sock or the skivvies themselves and drop them in the can.

Improvise. Adapt. Overcome.


Thu, 09/16/2010 - 18:04 | 586481 perchprism
perchprism's picture


I went prospecting on the Merced River in 1992 for six months, living in a tent, and I once ripped the pocket off a shirt because I ran out of TP.

Thu, 09/16/2010 - 20:11 | 586778 Frank Owen
Frank Owen's picture

and...? Apart from the shirt, how did you make out?
"I went panning for gold and all I got was this shitty shirt"

Thu, 09/16/2010 - 20:50 | 586851 kathy.chamberli...'s picture

hi frankO

Thu, 09/16/2010 - 21:51 | 586956 RockyRacoon
RockyRacoon's picture

That is some funny stuff!  Have you considered stand-up?

Thu, 09/16/2010 - 22:02 | 586979 Frank Owen
Frank Owen's picture

lol, never seriously.

Fri, 09/17/2010 - 00:03 | 587149 RockyRacoon
RockyRacoon's picture

That's good.  Serious won't work.  You gotta be funny.

Thu, 09/16/2010 - 19:24 | 586684 The 22nd Prime
The 22nd Prime's picture


You're showing your age. I was a Rifleman fan too, paw.

Thu, 09/16/2010 - 19:01 | 586633 UncleFester
UncleFester's picture

Only for a very short period of time.

Thu, 09/16/2010 - 16:35 | 586166 truont
truont's picture

Roubini, you inspired me with your comments:

" If you want to hedge against inflation, stock up on Spam or other canned food or buy futures on commodities that have more physical uses and consumer demand....Unlike other commodities, it [gold] has little intrinsic value."

I am now going to buy lots and lots of silver

h/t Roubini

Thu, 09/16/2010 - 21:58 | 586168 DarkMath
DarkMath's picture

"Investors should thus be wary of getting the gold bug and being stuck with this barbarous relic"

I wonder how he feels about the other barbarian relics like

The Wheel



Sword Play

Look how advanced Barbarians can be:

Thu, 09/16/2010 - 16:22 | 586171 crosey
crosey's picture

Gold is way too much in the spotlight.  And, whenever they wish, TPTB will once again make it illegal to own the pretty stuff.

I think silver will be the sleeper that awakens when fiat currency is burned for its heat value.

Thu, 09/16/2010 - 16:24 | 586177 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Yeah right.  Tell me to do something/ see if I do it.  Being some power that "be"s won't help your tongue either.  I got my own.

Thu, 09/16/2010 - 16:29 | 586190 crosey
crosey's picture

Just remember who won the Whiskey Rebellion.

Thu, 09/16/2010 - 16:33 | 586205 goldmiddelfinger
goldmiddelfinger's picture

General Alexander Hamilton.

Thu, 09/16/2010 - 16:49 | 586255 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

There is no wrong/right answer here, just opinion of a term "won".  "Won" is a lame consideration.  Consider, "who benefitted" most.  I could say Jefferson benefited more than anyone else.

Thu, 09/16/2010 - 16:46 | 586243 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The tax was barely collected and did not last the decade. 

Thu, 09/16/2010 - 16:26 | 586182 Hubbs
Hubbs's picture

Precious metals sales companies are bombarding us with advertisments to buy and sell gold. The reality: churn baby churn! These sales comissions aren't cheap. My theory is that you have to pay above spot to have the physical gold in a readily identified, easily quantified amount when it comes time for a trade in. I would hope to sell it to someone at spot - who doesn't want to pay the sales fee. The only way to do this is deal only with obvious bullion. "oh that's a gold 1 oz maple leaf. Gold is going for 100,000 federal fiat phonies today and its a done deal. He doesn't want to go through a retail seller who may have to report the sale. I sure as hell don't want to have to report the nominal "profits" to the IRS. We are both happier.


Where have  I seen this back and forth sale and resale before? The God damned timeshare sales and resales. I blew $17,000 five years ago for time share in Orlando. Dumbest and most impulsive purchase in my life....well maybe second most. 3 years later I paid $500 upfront to a listing company, whoseonly service has been to sell the list of the chumps who ponied up the listing fee to other timeshare resellers. Now I have to listen the constant boiler room calls asking me if I want to sell my timeshare...get this...FOR A PROFIT! I yell at them that the maintenance fees themselves are approaching the going discount rates offered to the non-owner, and that for this rerason you can't give these timeshares away.

Hey? How did I get on this rant?



Thu, 09/16/2010 - 16:37 | 586220 SilverIsKing
SilverIsKing's picture

Buying timeshares in Orlando can make you crazy.  Have you tried dealing with RCI or Interval?

Timeshare rule #1: Don't buy timeshares in Orlando

Timeshare rule #2: Don't join the timeshare exchanges

Timeshare rule #3: See rules #1 and #2

Thu, 09/16/2010 - 16:45 | 586242 Dr. No
Dr. No's picture

Judging from all the forclosures in Florida, looks like a lot of people have broken the first rule fo Time share.

Thu, 09/16/2010 - 16:46 | 586248 goldmiddelfinger
goldmiddelfinger's picture

How much time can a sane person spend at technology deprived Disneyworld.

Thu, 09/16/2010 - 16:44 | 586241's picture

Thanks for sharing your time.

Thu, 09/16/2010 - 17:12 | 586328 Treeplanter
Treeplanter's picture

Live and learn.  When I priced the premiums of the bullion dealers who spend a fortune on advertising I found there were plenty of cheaper premiums charged by large dealers who have no name recognition.  But their Maple Leafs are just as real as the TV guys.

Thu, 09/16/2010 - 21:46 | 586947 Threeggg
Threeggg's picture


Did the same thing in Hawaii (timeshare)

School of hard knocks

lessons are expensive !

I paid for them

Thu, 09/16/2010 - 16:28 | 586187 goldmiddelfinger
goldmiddelfinger's picture

Rare Earty Metals baby. They are RARE and you don't have any.

Thu, 09/16/2010 - 17:15 | 586343 Treeplanter
Treeplanter's picture

I have some Avalon.  But some miners have only a small part of the rare list.  Who has the rarest of the rare and in profitable concentrations?  I get the impression that only China does.  Anyone got the word on this stuff?

Thu, 09/16/2010 - 17:23 | 586364 Treeplanter
Treeplanter's picture

I have some Avalon.  But some miners have only a small part of the rare list.  Who has the rarest of the rare and in profitable concentrations?  I get the impression that only China does.  Anyone got the word on this stuff?

Thu, 09/16/2010 - 18:03 | 586475 DoChenRollingBearing
DoChenRollingBearing's picture

gold, Tree,

My take on the rare earths sector is to look hard at those who can (or will develop) the ability to separate the different metals and then process them into product for sale.  There is VERY LITTLE capacity to do that in the USA.  MCP is 'talking' to Neo in Canada (that I guess can process the rare earths), Avalon is 'talking' with someone about building a plant, GWMGF has two facilities to separate and refine, Lynas in Australia is building such capacity.

It looks like I will stay away from just the miners, as the money to made (value added) is in the processing.

Thu, 09/16/2010 - 18:55 | 586612 Treeplanter
Treeplanter's picture

Good tip.  Think I'll sell my 300 toe in the water shares and buy EXK.

Thu, 09/16/2010 - 16:28 | 586189 lsbumblebee
lsbumblebee's picture

Nice. All of the old hackneyed excuses for not owning gold are right there in one easy to read piece of crap. Not coincidentally has "Dr. Doom" been richly rewarded for serving his masters well.

Thu, 09/16/2010 - 16:29 | 586192 wafflehead
wafflehead's picture

for all those who have a problem not being able to eat gold just give it to me. I will eat it then when i crap it out i will put it in a safe place.

Thu, 09/16/2010 - 16:32 | 586201 Village Idiot
Village Idiot's picture


Thu, 09/16/2010 - 16:33 | 586204 Developers
Developers's picture

What goes up, must come down right?!?

The good doctor is blowing me away with his!

I believe that one should accumulate silver first, in various sizes.  Then accumulate some gold in smaller sizes for ease of exchange. Maybe keep a few FRNs around as TP.

Thu, 09/16/2010 - 16:36 | 586218 barkingbill
barkingbill's picture

there is no currency you can eat. 

Thu, 09/16/2010 - 16:46 | 586246 GoldSilverDoc
GoldSilverDoc's picture

Sorry, you're wrong.   There have been all kinds of "intermediate commodities", which were used as currency;  wine, pepper, spices....  Lots of 'em.  Some of 'em quite tasty.

Thu, 09/16/2010 - 19:58 | 586744 Bringin It
Bringin It's picture


Thu, 09/16/2010 - 21:36 | 586927 Doctor sahab
Doctor sahab's picture

dates as well. 

Thu, 09/16/2010 - 21:59 | 586972 RockyRacoon
RockyRacoon's picture

Prison money can be lit up and smoked.  Same diff.

Thu, 09/16/2010 - 21:41 | 586936 e_goldstein
e_goldstein's picture


Thu, 09/16/2010 - 16:41 | 586230 Turd Ferguson
Turd Ferguson's picture

I'd expect gold to open higher tomorrow. The highs of the day may, in fact, be at 8:00 EDT.

The EE will then commence their first smackdown. Look for a quick $10 hit. A recovery and then another coordinated hit. All done is a vain attempt to force a close on the Oct10 contract under 1267. If they cannot, for whatever reason, its off to the races. 1350 here we come. If the EE is successful (Roubini's hit job part of the strategy. Prechter will be next), you may get another couple of weeks of sideways action before the real breakout.

That said, for the first time in a long time, I don't think the EE will be successful. The silver Crimex is broken. They are empty. Thus, silver and gold will find bids upon every EE attack. Gold will close tomorrow above 1270, maybe even above 1275 and through 1280.

We'll see. Either way, tomorrow is going to be a very significant day. Buckle up!

Thu, 09/16/2010 - 19:14 | 586669 boiow
boiow's picture

if you are right i will have the day off just to watch the action. i must admit i did'nt think we were as  close as that to a big breakout.

 the way i see it , is they have to resort to " extraordinary measures" to keep it from being too obvious as the consequences are dire if they lose control.  (dire for them, that is).

Thu, 09/16/2010 - 16:41 | 586231 Ned Zeppelin
Ned Zeppelin's picture

Tick, tick, tick -  gold rises with the sun as dawn breaks over another day of brisk currency printing.  Gold is the tell.

Thu, 09/16/2010 - 16:41 | 586232 JonNadler
JonNadler's picture

Much like a fiat currency, gold’s value is based largely on the irrational beliefs of investors."


HA HA HA HA,good one Dr.! Why didn't I think of that one?

Thu, 09/16/2010 - 16:41 | 586233 theoakman
theoakman's picture

Isn't this the same clown who said oil wouldn't go above $40 in 2009 and Gold has no chance of breaking $1200.  How many times does this guy need to be wrong before people stop paying attention to this Keynesian idiot?  Nouriel is simply waiting for Nassim Taleb to come out with a new book so he can bite off Taleb's predictions some more and take credit for them.

Thu, 09/16/2010 - 16:53 | 586263 Pladizow
Pladizow's picture

He who predicts the future, lies, even if he tells the truth!

Thu, 09/16/2010 - 17:10 | 586310 Spalding_Smailes
Spalding_Smailes's picture

"We will not have any more crashes in our time." - John Maynard Keynes in 1927


"I cannot help but raise a dissenting voice to statements that we are living in a fool's paradise, and that prosperity in this country must necessarily diminish and recede in the near future." - E. H. H. Simmons, President, New York Stock Exchange, January 12, 1928


"There may be a recession in stock prices, but not anything in the nature of a crash." - Irving Fisher, leading U.S. economist , New York Times, Sept. 5, 1929


"Some pretty intelligent people are now buying stocks... Unless we are to have a panic -- which no one seriously believes, stocks have hit bottom." - R. W. McNeal, financial analyst in October 1929


"I see nothing in the present situation that is either menacing or warrants pessimism... I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress." - Andrew W. Mellon, U.S. Secretary of the Treasury December 31, 1929


"There is nothing in the situation to be disturbed about." - Secretary of the Treasury Andrew Mellon, Feb 1930


"All safe deposit boxes in banks or financial institutions have been sealed... and may only be opened in the presence of an agent of the I.R.S." - President F.D. Roosevelt, 1933

Thu, 09/16/2010 - 17:49 | 586438 kathy.chamberli...'s picture

did they get away with sealing all safe deposit boxes? i can't believe they can do that. WTF.

Thu, 09/16/2010 - 18:03 | 586465 Spalding_Smailes
Spalding_Smailes's picture

Executive order: By virtue of the
authority vested in me by Section 5(B) of
The Act of Oct. 6,
1917, as amended by section 2 of
the Act of March 9, 1933, in which
Congress declared that
a serious emergency exists, I as
President, do declare that the national
emergency still exists;
That the continued private hoarding
of gold and silver by subjects of the United
States poses a
grave threat to the peace, equal
justice, and well-being of the United
States; and that appropriate
measures must be taken immediately
to protect the interests of our people.


"Therefore, pursuant to the above
authority, I herby proclaim that such gold
and silver holdings
are prohibited, and that all such
coin, bullion or other possessions of gold
and silver be tendered within fourteen days
to agents of the Government of the United
States for compensation at the
official price, in the legal tender of
the Government. All safe deposit boxes in
banks or financial
institutions have been sealed,
pending action in the due course of the
law. All sales or purchases
or movements of such gold and
silver within the borders of the United
States and its territories,
and all foreign exchange
transactions or movements of such metals
across the border are herby prohibited.

"Your possession of these
proscribed metals and/or your maintenance
of a safe-deposit box to
store them is known to the
Government from bank and insurance
records. Therefore, be advised
that your vault box must remain
sealed, and may only be opened in the
presence of an agent of
The Internal Revenue Service.


"By lawful Order given this day,
the President of the United States."

Thu, 09/16/2010 - 17:59 | 586467 Rob Jones
Rob Jones's picture

"All safe deposit boxes in banks or financial institutions have been sealed... and may only be opened in the presence of an agent of the I.R.S." - President F.D. Roosevelt, 1933

There is a wikipedia article which calls this an "folk rumor on the internet" and says that the actual executive order never contained these words. I wasn't around in 1933, so I can't say for sure.

Thu, 09/16/2010 - 18:34 | 586559 kathy.chamberli...'s picture

terrifying, simply horrifying. what can't a president get away with. that is nauseating to think they got away with that. what was the government fearful of? people hoarding gold? personal safes, not so, right? or am i missing the main point of NO HOARDING of gold, sought to be illegal.


Order 6102 specifically exempted "customary use in industry, profession or art"--a provision that covered artists, jewelers, dentists, and sign makers among others.

this is an interesting exemption, right?

Thu, 09/16/2010 - 18:49 | 586592 Oracle of Kypseli
Oracle of Kypseli's picture

Theu wanted to get as much gold as possible knowing that they wil devalue the dollar next day. they did not want the sheeple to profit. 

Thu, 09/16/2010 - 18:52 | 586598 Spalding_Smailes
Spalding_Smailes's picture

"terrifying, simply horrifying. what can't a president get away with."


Well for one no blowjobs.

Thu, 09/16/2010 - 16:43 | 586237 CitizenPete
CitizenPete's picture

Being a humanist at heart, and out of charity and my philanthropic urges, am currently offering $22/gram for anyone who would like to very quickly heave off their yellow boat anchor.  Any quantity of stamped triple nine bar or coin will be reluctantly exchanged, this week only so hurry hurry hurry.  Before the bottom drops out on that overpriced electrical conductor.  PM me today to arrange the exchange.  I can get as much green linen or electronic numbers added to your screen, as you have yellow door stops.  Move fast before it all goes to ZERO(hedge).  

Thu, 09/16/2010 - 16:44 | 586240 PhattyBuoy
PhattyBuoy's picture

Roubini is a "shill" at this point in time, and was bought and paid for a long time ago ...

Thu, 09/16/2010 - 16:53 | 586262 Babalooee
Babalooee's picture

In a 15 rounder of profit making, not intellectualizing, toe to toe, Sprott Vs. Roubini, my money (gold) on Sprott to win every round.

Thu, 09/16/2010 - 17:02 | 586285 ArrestBobRubin
ArrestBobRubin's picture

Damn straight, Roubini would never see the 2nd round.

Sprott by KO 1:35 into the 1st. Jab, jab, left hook, then a haymaker uppercut to leave the little creep in a heap.

Thu, 09/16/2010 - 16:54 | 586266 Jason T
Jason T's picture

You cannot eat gold or burn gold.

No, but if you don't have any gold, you won't eat.

Do NOT follow this link or you will be banned from the site!