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Suddenly, Gold Becomes a Pariah
There they go again! No sooner had we finished praising the Wall Street Journal for their blunt assessment of the coming train wreck in municipal bonds than they do a hit-job on gold. The article, which appeared in Thursday’s editions, would seem to have exhausted the inventory of clichés employed by establishmentarians these days to put the knock on the yellow stuff. Here’s their short list:
- Worries that China will “slam the brakes on its economy”
- Improving U.S. stats that diminish gold’s safe-haven status
- A too-strong rally in 2010 that has made “some” fund managers skeptical
- Stepped-up redemptions in SPDR Gold Shares
- A hike in margin requirements by the CME
- Markets that are “increasingly betting” against new Fed stimulus
And if all that weren’t enough, the authors of this piece, Carolyn Cui and Liam Poleven, trotted out Dennis Gartman, the Darth Vader of the precious-metals world, to spout the kind of vague hyperbole that could sound even dumber a few months down the road, as so many of Gartman’s bearish pronouncements on bullion have over the years. “Everywhere you went,” said Gartman, “everyone you knew was aggressive long [sic]. That’s a bad sign because it means everybody has already bought.”
We might ask, have you bought gold yet? How about your relatives? Friends? Neighbors? That’s what we thought. It’s not exactly as ubiquitous as beer in the ‘fridge, is it? You can write Gartman c/o Kitco, to set the record straight. As for the bullet points listed above, even taken together they have about as much heft as a bullish economic forecast from the Fed chairman. For starters, although China’s slamming on the brakes could conceivably send the global economy into a fatal tailspin, that would only put more pressure on the Fed to monetize Treasury debt. Concerning the alleged improvement in the U.S. economy, it looks like little more than a blip in manufacturing to us – one that is vastly overshadowed by a gathering budget crisis at all levels of government. As for gold’s “too-strong,” 30% rally in 2010, mightn’t it prove to be just a warm-up for a push to heights that would actually begin to discount the intrinsic worthlessness of the world’s currencies? And how about those stepped-up SPDR redemptions? In fact, they’ve amounted to just 29.3 metric tons so far this year – too small an amount to even interest such sovereign buyers as China, India, Russia, Brazil and Saudi Arabia. As for the hike in futures margins, it’s just a banana peel tossed out by the regulators to give their friends, the bullion bankers, more time to cover. Finally, there are those bets against new Fed stimulus. That is one wager we’ll be eager to fade.
From a technical standpoint, we do see more downside to this shakeout – to at least 1322.20, basis the Comex February futures. That’s $24.30 below Thursday’s settlement price, and if it is reached, gold will have corrected a whopping six percent from December’s record highs. Frankly, because we like to see symmetry in our charts, we’d be more comfortable with a correction of 15% that matches the one that occurred at the beginning of last year. That would bring the price of gold down to about $1217. Whatever happens, and regardless of whether it is inflation or deflation that is perceived as the bigger threat, we would be inclined to view the selloff as merely corrective rather than the beginning of a long-term bear market.
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" If you are long gold, you are at war with Ben Bernanke. "
So is the rest of the world if that be the case, and SURPISE, they are.
think of him as our yellow JP Morgan
I find their lack of faith disturbing.
+1
One thing I fail to understand is that why most analysts are recommending the purchase of Gold as a safe investment? The problem today is that the price of Gold is not derived by it's physical demand or supply but more by the speculative positions standing long or short on the commodity exchange like any other traded commodity, stock or currency.
The basic mechanism of price discovery (based on demand and supply for actual use) of anything traded on an exchange has been terminally infected by speculators having access to unlimited funds and super fast computers for trading leading to volatile price swings. This has been made worse by the launch of ETFs for anything and everything under the sun by the financial community.
The price of everything including Gold is likely to suffer when the speculators unwind their positions due to some event that they have not anticipated or foreseen.
http://www.marketoracle.co.uk/Article24581.html
@Gak
Enough already. At least find something new to paste. It can even be the same thing worded differently. If you want to be a spam ass piece of shit, try make it interesting.
Thats right but when these speculative contracts default because more people want to take delivery, the paper contract price of gold will plummet but good luck finding any physical when this happens. If there was any, the contract would not have defaulted.
After the COMEX/LBMA market defaoults, it might take a week or 2 for the BIS to get a physical market going and that first price could be anywhere from 5000 to 50,000 an oz.
This is why you have to buy your physical now.
Isn't that kind of backwards?
Once there is a general realization that 'paper metals' are worth nothing, the demand for delivery, to take physical possession of PMs, will take off. I'll tell you one thing; if gold goes to $200, I will be moonlighting as a salvage worker, stripping the copper piping out of foreclosed homes to sell for cash to buy gold with. I just haven't seen any good arguments supporting the notion that gold is worthless.
The only way to beat them is to outlast them. Buy and hold. Ignore price. Count ounces. Be happy.
Flagged
ak_khanna - In how many different places do you intend to cut and paste the exact same comment?
Alan Greenspan coming out in favor of a gold standard is like a career prostitute promoting celibacy.
When you're paid by the hour, who cares?
Busted! ...and they think we don't pore over this stuff, word by word.
"They" don't care. It's not "us" who they are trying to sway or deter. It's the marginal reader they have their eyes on.
They are targeting the frightened fence post sitter who senses something is very wrong in the world, but really doesn't want to know the truth because it's too terrifying. So the fence post sitter visits the alternative sites looking for a reason to leave and not believe their own gut feelings and worst fears. The disinfo isn't for us, but rather for the temporarily uprooted saplings blowing in on the wind.
"Daddy, tell me another lie so I can believe it's the truth."
This is why lies must always be refuted and the liars exposed.
+++
Expose the lies and lyin' liars. But, I do not know what we can do about the fence post sitters.
We can help ourselves by buying gold. Gold does not lie (unless it is tungsten). It just lies there.
Refute the lies and allow the fence post sitters to decide for themselves. To force them to one side will only frighten them to the other. This is why propaganda is used. Because it "allows" people the self deluded illusion that they made their own decisions when in fact they were manipulated.
Refute the lies at every crossing, state the unvarnished truth and trust in the truth. It's the only way.
When I was a kid I spent a lot of time on the farm of my best friend.. Practically lived there.
I remember when a cow would get loose. It was difficult to get them back into the barn or with the others. We had to move VERY slowly. If we moved quickly, the cow would certainly react and move in the opposite direction needed.
We would have to create a circle around and move slowly closing in and directing the cow to the barn..
I think people are like cows.. They will NOT be shocked into cognitive dissonance.
Ah, but only if the 'barn' is the truth, otherwise you lot are just invoking #17 (Change the subject+companions) of Cog D's linked article...maybe the cow knows damn well that its freedom doesn't lie in that stall.
Cows don't know diddly. It's been bred out of 'em.
Sorta like most of my relatives...
Very nice!
This is why you can't drive people to truth. It must be found, validated and then accepted by each person one by one. Often this requires courage because we have been conditioned to believe that over there is where the emotional and intellectual pain will be found.
We have been pounding our heads against the wall of lies for so long that once we stop for even a short period of time the entire world "feels" wrong. Mostly this is because our "world" is sustained by an interlocking web of lies that have no empty spaces for truth. Truth at this point contradicts nearly everything we "know". Because of this conundrum, a person must be hungry for truth, hungry enough to push through the pain of cognitive dissonance where they can then begin to tear down the wall of lies.
fight the fight! The fence post sitters will define history
Well said..
The same can be said about the stock and bond markets.
beat me to it. but I love it when you beat me.
What did the Masochist say to the Sadist?
"Beat Me!"
The sadist pulls back their hand and says: "No"
Psst. The safe word is.........
Silver?
Poodle !
Even though we understand that the mainstream media is used to promote disinformation, it helps to read about the techniques that are used to do so. As well, the comment section of various news groups, mainstream media web sites and blogs, financial or otherwise, are infected with disinformation disseminators. Below are three links to articles that describe the disinfo process via a list of items. Please take the time to review the rules of disinformation and then bookmark them for future reference.
http://spktruth2power.wordpress.com/2011/01/16/twenty-five-ways-to-suppress-truth-the-rules-of-disinformation/
http://www.brasscheck.com/martin.html
http://www.whale.to/b/sweeney.html
Great stuff!
Thanks for posting this.
I second that, C.D., thank you.
gold has become a pariah because the bankster cabal is flushing out all the weak hands and weak minds out of the only real hedge. never forget they , by their own addmission like to buy when the blood is running in the streets, i do not think they were speaking metaphorically either.
This time when the blood is running in the streets, it's likely to be the blood of the investment bankers at the hand of the proletariat. I hope I'm wrong, but it's just the way I see it...
In other news LBJ killed JFK
in other words: bullish gold.