The "Sovereign Man" On What To Look For "When The Gold Market Tops"

Tyler Durden's picture

Your rating: None

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 12/21/2010 - 18:04 | 822272 MsCreant
MsCreant's picture

Seems common sense.

Tue, 12/21/2010 - 18:09 | 822288 LowProfile
LowProfile's picture

Except that when the scenario above plays out, gold will be floating freely, and there will be no need to 'sell at the top', because the top will be the new baseline.

Tue, 12/21/2010 - 18:33 | 822372 Arius
Arius's picture


another indicator would be America best (richest) investor W. Buffet turns to gold...surely we are long way off, from people in the street being bulls...

Tue, 12/21/2010 - 18:59 | 822455 Jasper M
Jasper M's picture

I predict Warren will turn to dust before he turns to gold. 

Tue, 12/21/2010 - 19:23 | 822497 Arius
Arius's picture

My bet is Buffet will turn to gold in 2012.

Buffet will lead to gold the other less privileged americans...come to think of the blind leading the blind.

Imagine the headlines and comments on CNBS: Buffet recommends gold!

Tue, 12/21/2010 - 19:32 | 822529 traderjoe
traderjoe's picture

Buffet is one of the biggest beneficiaries of the fiat system. He will never publicly buy gold. If he does it, it will be on the sly and in smaller quantities. CNBS will continue to call gold a 'commodity' (and not an alternative money) until they shut the station down for lack of ratings. 

Tue, 12/21/2010 - 19:39 | 822549 Arius
Arius's picture

agreed on all points - what i am saying is by 2012 the GAME IS OVER...even Warren could see it.

we will be on the verge of the New World and new currency most likely w/ gold backing...

Tue, 12/21/2010 - 19:45 | 822560 The Chartmeister
The Chartmeister's picture

Us "old guys" remember when Buffett was buying silver in the late 90's.

Tue, 12/21/2010 - 19:58 | 822587 barkster
barkster's picture

betcha jpm had something to do with his quick exit from silver...

Tue, 12/21/2010 - 20:11 | 822623 Arius
Arius's picture

yup - i think he is collateral damage...did he sell when silver was smt like $5 or $6 not sure

and he goes bailout GS - they got his number all right...LOL

Tue, 12/21/2010 - 21:38 | 822863 dogbreath
dogbreath's picture

buffet was out of silver by the time of the first silver spike to 8.30.  his physical was used to crush some early silver specs.

Tue, 12/21/2010 - 22:17 | 822953 jeff montanye
jeff montanye's picture

silver's cool.  have some stocks.  like majestic.  

fofoa gave me second thoughts though.  he's so persuasive.

speaking of gold, did anyone notice jesse's gold chart with a target of 1375?  pretty pretty.  next stop 1455.

Wed, 12/22/2010 - 03:17 | 823373 LowProfile
LowProfile's picture

Most people who are bullish on gold (including those here), and bearish on everything else, even to the point of thinking there will be a hyperinflationary crack-up, still think there will be somewhere to hide in the paper markets.

They will be wrong.

Ultimately, you will only 'own' what you can physically control.

Silver is very cool, but when it starts getting too hot to handle, you need to swap it for you-know-what.  Scale out as the GSR plunges.  IMO.

Wed, 12/22/2010 - 01:17 | 823258 RockyRacoon
RockyRacoon's picture

Would anyone buy silver at $30 an ounce with an instant hedge of $20 an ounce guaranteed?  Buy $20 face value silver coins for $30 each.  Is that a better deal than U. S. silver Eagles with a face value of only $1?  Good question, eh?  Here's how to hedge that $30 purchase, and these are available all day long:

Wed, 12/22/2010 - 01:51 | 823291 Money Squid
Money Squid's picture

RC, them coins are selling $399 + $24 shipping to Amerika, so...let me see that's $42.30 an ounce, not $30. Plus, how do I know its good for $20 if its just an Olympic coin ?

Wed, 12/22/2010 - 11:08 | 823752 RockyRacoon
RockyRacoon's picture

They are averaging a bit over $300 per set and you'll pay shipping with anything you buy so that's moot.   The coins are legal tender with a face value of $20.  You can pull them out of the capsules and spend them at your local grocery store (after convincing the clerk that you are not a total nut-job).

Here are closed auctions on those particular coin sets:

Wed, 12/22/2010 - 05:59 | 823422 Lord Koos
Lord Koos's picture

I guess you aren't keeping track... 90% silver coins are presently selling on ebay for around 20 times face value as long as silver hovers in the $29-30 price range.  The face value of .999 silver in 1 oz coins is meaningless.

Wed, 12/22/2010 - 11:16 | 823760 RockyRacoon
RockyRacoon's picture

 The face value of .999 silver in 1 oz coins is meaningless.

No, it's not meaningless.  The face value of a Mercury (Winged Liberty) dime is 10 cents so that's your downside.  The face value of a Silver Eagle is $1 so that's your downside.  The face value of the Canadian Olympic commemorative is $20.  See where I'm going with this?  The face value of your legal tender coin is always a hedge against the price of the metal in the coin.  Any bank should exchange your coin for fiat if you must have paper money for a transaction in the retail market.  The U.S. Mint (Treasury) were no fools when they gave the silver a face of $1, and the gold Eagles at $5, $10, $25, and $50 for the 1 ounce coins.  They were never meant to circulate (Gresham's Law doncha know).  What were the Canadians thinking!?

Wed, 12/22/2010 - 11:25 | 823800 romanko
romanko's picture

If you're bent on hedging using the legal tender face value, just buy boxes of US nickels. Their 75%copper/25%nickel composition has current metal value of 6.6cents, an instant 32% gain, and their "downside" face value is 5 cents each.

Wed, 12/22/2010 - 12:20 | 823950 RockyRacoon
RockyRacoon's picture

True! Same holds true for cents pre-1983.  Cents were 95% copper.

If one is unafraid of prosecution for melting them into ingots, go for it. 

Recent changes in the law for these coins (cents and nickels) were not for the fun of it.

Tue, 12/21/2010 - 19:51 | 822574 Jendrzejczyk
Jendrzejczyk's picture

Just a guess, but a good portion of his real estate holdings could be sitting on gold producing soil. Stealthy, without admitting anything.

Wed, 12/22/2010 - 01:47 | 823287 shano
shano's picture

Except Warren has "bought" gold, by investing in Richline  and Bel-Oro and Aurafin, gold jewelry suppliers, and Helzberg Diamonds, a retail jewelry chain.  The best way to make money on gold is to sell it because then you can make money whether it goes up or down.

Tue, 12/21/2010 - 20:46 | 822679 akak
akak's picture

I suspect that you are exactly correct, LowProfile, and that all those who are simplistically calling for gold to eventually enter some faux, manipulated-market bubble like equities in 2000 or 2007, or real estate in the middle 2000s, are just not appreciative of the fact that the "bull market" in gold in the last 9 years is NOT in fact just another market fad, but represents a fundamental realignment (still in its early stages) of the world financial and monetary systems.  As long as the dollar continues to depreciate, the price of gold can only continue to go higher, especially as the overt manipulations of world monetary authorities to attack it and hold it back are increasingly becoming widely recognized, and are therefore increasingly failing.

Tue, 12/21/2010 - 20:50 | 822721 Al Gorerhythm
Al Gorerhythm's picture

when gold starts paying an income, it will be in a bubble.

Wed, 12/22/2010 - 03:19 | 823375 LowProfile
LowProfile's picture


Tue, 12/21/2010 - 21:00 | 822758 FreedomGuy
FreedomGuy's picture

Its not just the dollar. It's virtually every currency in the world as they race to the bottom to try and favor exports over imports. Pegged currencies like China and S. Korea have to follow the leaders down the hole. PM's are the alternative to all currencies and even the poor schlub in the article that buys at the top will find that over time he will still do OK. That schlub whether or not he realizes it just bought an insurance policy against hyperinflation, too. That's the extra benefit of PM's. It's not just the value aspect. It's also the insurance aspect. Like the insurance you buy on your house, car and life, you are likely never going to need it, but if you do, you are soooo glad you have it and it becomes a bargain.

Wed, 12/22/2010 - 01:11 | 823254 akak
akak's picture

Its not just the dollar. It's virtually every currency in the world as they race to the bottom to try and favor exports over imports.

You are correct, and I was negligent and/or sloppy in not more explicitly stating "fiat currencies" when I said "the dollar".  Yes, of course, all fiat currencies are roughly as corrupt and unsustainable as all the others, and once one major one begins to truly crumble, it is very likely that ALL of them will very shortly follow. 

All those who believe, due to their narrow and faulty focus on the contrived and artificial US Dollar Index, that if the Euro should radically fall or collapse, that the US Dollar will therefore automatically "rise", are living in mainstream propaganda-fed fantasy world.

Tue, 12/21/2010 - 22:13 | 822945 Billy Shears
Billy Shears's picture

Yeah, what he said...Mother F***in' GOLD BITCHEZ!!!

Wed, 12/22/2010 - 00:55 | 823242 masterinchancery
masterinchancery's picture

The question is, at the top what paper currency will be desirable enough to accept in exchange for gold?  Not the unbacked US dollar I think. What would make sense, as happened after the Civil War, would be to exchange gold for gold-backed notes, at a slight premium.  But most gold will never be exchanged for paper.

Wed, 12/22/2010 - 01:59 | 823307 Long Strange Trip
Long Strange Trip's picture

At the top you wouldn't exchange your gold for fiat paper but instead exchange it for Real Estate (which should have finally cratered by then), equity in businesses, capital equipment, - any real tangible asset...

Wed, 12/22/2010 - 02:20 | 823334 tdogg
Tue, 12/21/2010 - 18:30 | 822327 waterdog
waterdog's picture



Tue, 12/21/2010 - 18:29 | 822356 waterdog
waterdog's picture

It sure does- has anyone heard about what the premium is to purchase from an ATM?


Tue, 12/21/2010 - 21:17 | 822805 RockyRacoon
RockyRacoon's picture

It was reported on (drum roll, please) CNBC, that the premium is about 5% over spot and that the machines are linked to input that updates the prices every 10 minutes.  Considering the source I'd be suspect of the numbers...

Tue, 12/21/2010 - 18:33 | 822369 Eally Ucked
Eally Ucked's picture

Yes, it is, the only fault in that thinking is that, that it is based on outdated perception of the economic order, first old USD must be replaced with something new and then his points will be valid.

Tue, 12/21/2010 - 18:05 | 822278 gwar5
gwar5's picture

Gotta have some gold for the 21st Century.

Tue, 12/21/2010 - 18:30 | 822360 Arius
Arius's picture

yeah, but to quote one of TBTF geniuses "as long as music plays you got to dance"

Methink Buy some Google (cramer recommended) and Neflix.


Tue, 12/21/2010 - 21:17 | 822809 RockyRacoon
RockyRacoon's picture

While the music is playing, and the fools are dancing, we're sawing the legs off the chairs.

Tue, 12/21/2010 - 18:06 | 822280 Al Gorerhythm
Al Gorerhythm's picture

You forgot; Johnny Bravo will be seen standing at the head of the buy line.

Tue, 12/21/2010 - 18:20 | 822331 Andy_Jackson_Jihad
Andy_Jackson_Jihad's picture

Robo will have an avatar with small tit-tays too.

Tue, 12/21/2010 - 18:14 | 822307 NotApplicable
NotApplicable's picture

Safety deposit boxes will empty out in an instant once they start being seized in earnest. I would never, ever use one.

Tue, 12/21/2010 - 18:17 | 822318 JonNadler
JonNadler's picture

you can store your gold at our vault and we'll give you a nice certificate for it. We'll keep it reaaaaal safe for ya

Tue, 12/21/2010 - 18:35 | 822381 Arius
Arius's picture

is it Fed insured?

Tue, 12/21/2010 - 18:42 | 822400 MsCreant
MsCreant's picture

Maybe method acting classes with Konstantin Stanislavsky. I dunno, you're just not hateable enough. The upside down robo photo is a plus. You need to tap into your greedy, seedy, inner salesman, desperate, scared, bitch and really let it rip. Remember, you are in denial, you must get folks to stop buying the stuff, or Jaime will make fun of you and make you a playground reject. You must have his approval, you are desperate for it, you will do anything. You are nothing without him. You'd suck the smeg.... Never mind, you get the idea. 

Make us hate you if you really want to be a righteous effigy troll. Or is your heart just not into it? How does Johnny Bravo do it?

Tue, 12/21/2010 - 18:56 | 822425 DoChenRollingBearing
DoChenRollingBearing's picture

JonNadler, looks like MsCreant turned down your offer at Jamie's place...


Remember, as the great Johnny Bravo taught us:

1)  You can't eat it!

2)  It is in a Rising Wedge!

Au to $0.02!

Ag to $0.01!

I miss Chumba...  When are you coming back, bud?


EDIT: Guess you are stuck with Blythe now,  JonNadler...  Bummer!

Tue, 12/21/2010 - 19:00 | 822456 traderjoe
traderjoe's picture

Honestly, I don't think Bravo was a troll like Harry or Toothis are. I think he was what he said he was - a college student learning how to trade. He had a perspective - but it was 'immature/uninformed' (he thought of gold as a commodity and didn't have the perspective to understand why gold was going up). He made a bet about the direction of gold, lost, and seems to have followed up on leaving. Unless he's now under a new avatar which is entirely possible. I think, personally, one of the reasons he was not liked was because he kept saying the same stuff over and over (and over) again - like how he didn't understand paying a premium over spot for coins. Over and over again. Did I say over and over again?

I don't know why I felt like defending him just then, but we've seen an increase in trolls lately, and for some reason he just didn't strike me as a troll (i.e. someone being intentionally difficult just to get a rise out of people). Just someone that had a different opinion - which I do like to hear now and again.  

Tue, 12/21/2010 - 19:37 | 822542 MsCreant
MsCreant's picture

You gotta give it to him, he could really draw fire. If he was a clown at the rodeo, he got all the gold bulls to go after him very effectively!

Tue, 12/21/2010 - 21:21 | 822816 RockyRacoon
RockyRacoon's picture

He was so obnoxious and wrong to the point of being clownish -- and intransigent.

That's about the best compliments I can pay him.


Wed, 12/22/2010 - 10:06 | 823597 Miss Expectations
Miss Expectations's picture

You probably realize that the reason the bulls are jumping and gyrating is because they have a cinch around their hindquarters that tightly squeezes their testicles.  If the clown would attend to getting the cinch off, us gold bulls would look less crazy.

Tue, 12/21/2010 - 20:06 | 822601 Village Idiot
Village Idiot's picture

Johnny wasn't a troll.  Johnny forced "opinion" out of people.  Personally, I like fact-checking opinion.  And Johnny didn't come off as an asshole, Johnny was a nice boy.

Speaking of nice boys, NORAD has a website for tracking Santa.  The kids seem to enjoy it -



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