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That's Gold, Jerry! Gold!
Deficit
spending is simply a scheme for the confiscation of wealth. Gold stands
in the way of this insidious process. It stands as a protector of
property rights. If one grasps this, one has no difficulty in
understanding the statists’ antagonism toward the gold standard.-
Alan Greenspan, “Gold and Economic Freedom,” 1966
We used the above quote from Alan
Greenspan to kick off our Third Quarter 2007 Broyhill Letter.
Amazingly, in 1966, Alan Greenspan “got it.” We wonder when he “lost
it” between then and now. In any event, friends and family know well
enough that we have been consistent and confident gold bugs since the
early part of last decade. The investment thesis has only strengthened
today with proliferate government spending no longer limited to our
friends in Washington. Despite the yellow metal hitting new highs in
the face of a surging dollar (so much for historical correlations),
sentiment remains depressed and most investors we speak with have yet to
purchase a single ounce of gold. Our Bottom Line outlined in
that Q3-07 Broyhill Letter is as relevant today as it was three
years ago:
Charles Kindleberger set out three preconditions for a
mania where prices overshoot the bounds of rational valuation, in his
classic, “Manias, Panics, and Crashes: A History of Financial Crises.”
First there must be plenty of liquidity to fuel the asset price rise.
This is as true as ever today, given the global tendency toward low real
interest rates and strong money growth. Second, there must be a
“displacement,” which is defined as a fundamental shift that makes the
focus of the mania attractive. In the case of gold, this involves the
incentive for competitive devaluations of paper currencies, as well as
persistent geopolitical uncertainty. Finally, there must be uncertainty
about how the asset in question is properly valued, which allows for
“new era thinking” to take hold. Especially true for gold. Valuation and
gauging extremes is an art rather than a science as the metal is
heavily influenced by hard-to-measure factors such as central bank
intentions, political risk, policy irresponsibility, etc. It is easy to
argue that proper fair value is substantially higher than today’s levels
when one considers the jump from $600 to $700 has not yet spurred much
enthusiasm.
Our friends at WJB shared these pictures
with us earlier today. We’ve been smiling since. Interestingly, we
saw a very similar sentiment set-up in September-October 2009, when we
wrote A
Gold Mine is a Hole in the Ground with a Liar on Top.
Disclosure: At the time of
publication, the author was long Gold and long MarketVectors Gold Miners
ETF, although positions may change at any time.
»
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Gold MONKEYS
If this link below isn't signaling a top in Gold NOTHING WILL!!!! WAKE UP GOLD FOOLS.
http://www.newser.com/story/88750/gold-vending-machine-debuts-in-abu-dha...
Wait is that loaf of bread one gold piece? No here is a metal cutter, cut in into fours. LOL. You people are DELUSIONAL!!! ahahaha.
Where is Rocky Raccoon the 'gold salesman'?
Wait I think my mom is calling...You fing idiots. Booked 37k in the last week trading, hold on to that gold though worms!
I dunno, but this Jay fellow's profile pic kind of looks like it could be Nadlers' BA Grad picture after specializing in Keynesian Economics with a minor in European Statist Political Science.
Why do you morons think that everybody that disagrees with you is Nadler?
My GAWD, how gay. Like spelling GAWD instead of God.
Don't bash the gays, Johnny, be proud of what you are, a damned sexy man!
Price Bubble...
Looking back at historic highs...
It looks like its near its top... I have been wrog before... I will be wrong again... but for the newbies that come here and read, BUY! GOLD! ALL! DAY! AT! ANY! PRICE!
I am counter weight and anti-salesman... which most here are not.
http://goldprice.org/30-year-gold-price-history.html
Adjust for inflation and today's $1250 is equivalent to a price of $486 in 1980. Conversely, gold at $850 in 1980 would be equivalent to gold at $2184 today. Add in the fact that there is greater global economic instability and it's still a bargain at this price. Glad I got in before.
http://goldprice.org/30-year-gold-price-history.html
I agree with you representation of the numbers... but, risk vs. reward?
Or... Plainly, how agressive will the Governments of the World make sure a run like that never occurs again?
Maybe I am wrong, maybe I am right... But I am careful and I encourage everyone now days to be the same.
Be well, JW
551,000 open interest on the COMEX
Say $1,250.00 per ounce 100 ounce per
Contract. rough approximations of
Total capitalization on the comex for gold
Equals $68,875,000,000
Total capitalization of Amazon.com
Now $58,000,000,000
Anyone who says Gold is in a bubble just doesn’t
Realize these ratios.
Except that people buy things from Amazon.com, and they have earnings that justify their market cap.
The only thing tht justifies the market cap of the COMEX is religious speculators buying the shit out of gold in chicken little scenarios.
I buy from Amazon all the time.
Jay. You get it. For the other guys it's a cult.
That is, in the short run. Long run?
It's possible that the system will self destruct.
Then, gold and bullets will be barter currency.
But not yet.
Gold a bubble, a top, I think not. My trading station has about 45 traders, we trade, buy and sell every day. Smart guys, knowledgable traders, some doing it for many years. Only 1 has physical gold beside myself. Almost all, HATE gold and own 0 gold. They won't buy it and they do not think it is relevant to our circumstances. I have owned gold for years now. I cannot even get my own brother to buy any gold or PMs.
Gold has been in a bull market for years now. Not straight up, many dumps that try to scare us out. But it has been gradual. Much better than the crap like ABK that goes from 1 to 3 in two days.
As long as we have those who are negative and ignorant about gold and PMs, we have a long, long way to go. Never in all my years have I seen such destruction in our way of life and our society...as now.
You just buy timmy and benny bonds. I'll keep my gold.
Wow, you mean the "smart money" doesn't like gold? Never heard THAT before.
So who is left buying gold if the smart money is out?
That's right - the bagholders... errr... retail investors.
Also, I wouldn't call increasing 500% in a decade "gradual."
Monopoly, thanks for your interesting observations of other traders.
When these others (all but the one) say that they "hate gold", do they ever offer any rational or intelligent reason for feeling that way? Or are their only responses CNBC Keynesian talking points --- "archaic relic", "doesn't earn any dividends", blah blah blah?
I ask, because I don't discuss the topic of gold much with anyone I know in person, so the only anti-gold attitudes I encounter are in forums such as this one --- and virtually without exception, they are superficial, simplistic, and uninformed. So I wonder if these traders you know who hate gold have what you would consider intelligent or logical reasons for hating it.
I wrote a fifteen page paper (single spaced) about why hyperinflation is a myth, and gold is fundamentally overvalued today.
It's on my facebook blog. I'd love to link to it, but I don't want people knowing my real identity. Sorry.
Meanwhile, it seems to me that the posts detracting from gold, like Jay's, seem to have reasons why.
Where is your intelligent argument for gold? You might as well say "gold bitches!"
All you do is make superficial and simplistic comments, cry that other people should be banned, make insults to those that disagree with you...
Now you want to say that OTHER people do that? LOL. Project much?
I really, really dislike you akak.
And you are nothing but a vile and despicable troll who is utterly unworthy of being responded to in any detailed manner. I cast not my pearls before swine.
Is it just me or when people are jumping up and down screaming rally.... isn't there supposed to be some UPWARD! movement?
How about just a lil bit of UPWARD! movement?
No UPWARD! movement and in fact DOWNWARD! movement is not a rally! well unless you are a Gold Bug!
I read above... "Stupid is, as Stupid Does!"
Hurry... Limited time only!!!
Buy into the Gold Bubble...
But hurry! before prices dip any lower!
Don't be left out!
Don't be one of those who Bought Low to sell High!!!
The end is near... we are waiting on your call...
Republicans, Evangelicals and Sheepeople get here fast!
Before...
The Uni-Bombers, Rapture Crowd and / or other idiots steals your top spot!
You're annoying.
I would just like to add that I do think that the Euro will survive. This will only happen though with debt restructuring and different interest rates between the sovereign nations within the euro-zone. I know this sounds a bit crazy, but if for example a French bank wants to lend to a Greek bank, then the risk must be based on the the interest rates that exist in Greece and not those in France.
This would give us what a currencey should be. A reflection of the productive capacity of its people and the associated trust that goes with this. Until this happens, I'm very happy having a little pm exposure.
The bigest threat to the Euro at the moment is the German people. They know what happened last weekend. Merkel has stated that Governments must regain control over the financial services industry. The German people know this and will insist that it happens, even if this means going back to the deutschemarc. Given Goldman Sachs recent approval rating of 4%, I would think that the American people are feeling the same way, not neccairily about the dollar but about aspects of the finance industry.
This is "whats different" this time.
I've seen plenty of people shrug and say, "Eh... it's only money."
I've never seen anybody shrug and say, "Eh... it's only gold."
And that is the simple reason politicians love the fiat, hate the gold.
Channeling the infamous but ever so right, Dick Cheney:
Deficits don't matter. Provided they are backed up with new money created and used to hire and train the millions of workers who must now find new work to do.
And the best way to begin is to tackle galactic domestic problems like infrastructure and Energy independence.
Why are members of CONgress or theBamster telling us we are running out of money when that is bald-faced lie and they know it. Theoretically we can never run out of money.
Is this some kind of stagetery for the democrats to blow out the November elections by timing such a policy to gain maximum benefit?
If so, then why aren't republicans starting the chant now for millions of sure fire JOBS, JOBS, JOBS that will grow like Purple Haze on a Bangkok hillside?
As far I know, it's not the Dems saying we are running out of money.
It seems to me that it's the Republicans crying all the "pay as you go" noise, after their deficits for years and years.
Not that the Dems are better, but the Republicans are hypocrites of the worst kind.
They'll spend money to pay for wars that nobody wants, and a gajillion tanks and planes, but filibuster a bill to feed the unemployed.
I don't like the Dems very much right now, but the Rethuglicans can suckle my left ball.
A number of people on this thread have quoted text that just happen to also be in one of Jesse's latest posts. If his writing was an inspiration it would be polite to provide a link or acknowledgement.
yes proper acknowledge is the right thing thanks
With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people."
F. A. Von Hayek
from jesse site lol
gold will not have the sell off as per 1980
it will become part of the international monetary system.. nations that wish to play footsie with the printing game will find gold leaving its vaults
gold will probably raise to some sort of balance with the balance sheet of nations in the five thousand dollar range .
Do you realize how faulty that logic is?
The reason there is no gold standard is because there isn't enough gold to back the production of assets in the world.
Dollars are worth a lot more than the paper they are printed on. They are worth labor, food, housing, clothing, etc. All those things back the dollar.
If we had to depend on gold production to build those things, they wouldn't get built and we wouldn't have growth.
Gold will sell off again as soon as confidence is restored in the system. You can bet your life savings on it.
I knew it was only a matter of time before our resident gold-hating troll trotted out this bit of laughable Keynesian misinformation!
How insulting to even have to address it for the 345th time, but here goes MasterBater:
There is ALWAYS enough gold, it is only a matter of assigning it a value sufficient to back the money supply. Theoretically, one ounce would do the job.
But let me ask you, troll, and walk you through this: In 1800, there was enough gold (and silver) to back the world's money supply. In 1900, with a vastly expanded world economy, there was still enough gold to do the job. So tell me, in what particular year did the world's supply of gold become insufficient to back the world money suppply? Come on, I want an answer!
Since you seem so cocksure that you know that the current amount of gold is insufficient to back our money, you must have some idea of just how much would be sufficient --- so tell us, right now, how much gold, in your estimation, would be "enough"?
(I ask these questions only hypothetically, of course, as we all know that they are illogical in their framing, and therefore meaninglesss.)
The idea of a "gold standard" is only half the equation. We are constitutionally a bi-metal money standard. Gold keeps the money changes in New York and Switzerland in total control. Let's go for the "Gold and Silver Standard".
A "dollar" is officially defined as 371.25 grains of pure silver or 416 grains of "standard silver" (Coinage act of 1792.)
It has never been officially redefined (redefining it would be no more valid than saying you could redefine a square as having 3 sides and have it be true).
http://www.youtube.com/watch?v=cv2EMiR65NY
(if you have not seen this portion of Mr. Parks presentation, it is, pound for pound, one of the most important things you will ever see)
rusty the gold trolls .. do not read or have any understanding about the nature of gold
it is their standard procedure to kick dirt . spit and then leve the zero hedge to find refuge in their low level jobs . their frustrated inner selves being asked to brink coffee to the women boss.
here with a room and lap top . they can control the sound of their own vocal cords .
Yeah, I know. I just try to leave breadcrumbs for others to follow, if interested.
The simple fact that most people have no idea what a "dollar" is and have no idea how we came to this sorry state is an itch I just have to scratch.
Tu ne cede malis sed contra audentior ito, as they say.
I prefer "Tu ne sede malus" myself.
One manipulator gets investigated another takes up the role. But have to wonder at the tactic. Keeping the price of PM down now is a gift for those wanting to get in or increase their position.
The manipulators are attracting the ever increasingly fearful crowd.
"In the absence of a gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good and thereafter decline to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as claims on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to be able to protect themselves.
This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."
The above was said by Alan Greenspan, 'Gold and Economic Freedom' in 1966.
Check out Jesse's chart and commentary on the S&P 500 adjusted relative to gold. Very telling graphic that reinforced what my gut has been telling me - that there has been no recovery, just a trough since last spring.
edit - missing link http://jessescrossroadscafe.blogspot.com/2010/05/why-financial-engineers...
Yes, it's a shoo-in. It's so easy to make money here, especially when everybody does the same thing as you.
And since the euro is dead and the end of paper money is scheduled for only a few weeks out, you don't even have to wait long. So easy.
Good luck!
P.S.: Beware of lemming thinking.
so you follow the lemmings of the zit faced crowd
Wait what was that again, a crowded trade you say? How many people trade paper assets vs physical assets....mmm thats what I thought.
If 10% of the population had gold holdings I might agree with you, less than 1% do and even then out of that less than 1% few have more than 10% of their holdings in gold.
Just did a calculation 5.2 trillion worth of gold above ground (~4 billion ounces) at 1300 an ounce (what it would cost you to buy a coin). Now take that into consideration when the US has 12t+ in debt, Deravatives market is 100t+, unfunded liabilities is 50t+.
Burnbright, You are a fucking Coward and a Liar!
but other than that.. you can be my spring board bitch!
Is it just me or when people are jumping up and down screaming rally.... isn't there supposed to be some UPWARD! movement?
How about just a lil bit of UPWARD! movement?
No UPWARD! movement and in fact DOWNWARD! movement is not a rally! well unless you are a Gold Bug!
I read above... "Stupid is, as Stupid Does!"
Hurry... Limited time only!!!
Buy into the Gold Bubble...
But hurry! before prices dip any lower!
Don't be left out!
Don't be one of those who Bought Low to sell High!!!
The end is near... we are waiting on your call...
Republicans, Evangelicals and Sheepeople get here fast!
Before...
The Uni-Bombers, Rapture Crowd and / or other idiots steals your top spot!
you are a sick man. you are an angry man. there is something wrong with your liver.
Yes, it's very rational. And that's the problem. So, this time is different and we are in a new era: the era in which only gold is worth something.
Good luck!
Jay, after due diligence i bought silver to hold asset value during a time of honest doubt in our paper money. I had no choice. I know cows are handy in depressions, but they would ruin my garden and my girlfriend felt they wouldnt match the curtains. She agreed when i said "shiny" . Now i got her hooked on the sound of silver coins banging each other. We both look forward to seeing our silver laid on black satin after we check kitco spot price. We are waiting for the orgasmic closure to this episode at which time we will cut 100.00 bills to ribbons as a celebratory reaction to the end of our demise. Rebuilding the country is my dream.
I kind of thought that that was your dream and I surely did not want to disturb you dreaming.
"Yes, it's very rational. And that's the problem."
Oh I see your point now, I should put my money into companies that are worthless and have no fundamental reason to every increase in price or have the possibility of going bankrupt because then I would be buying low and selling high... that investment strategy totally makes sense!
"So, this time is different and we are in a new era: the era in which only gold is worth something."
Last time I checked MSM is talking about recovery and increase in housing starts, more debt is being thrown around, interest rates are lower than they have ever been, seems like the last ten years on hyperdrive. The problem isn't that "this time it is different for gold", its that it has remained the same for everything else.
Use logic next time please.
What's so bad about trading assets other than gold, anyway?
I've been trading VXX, which is a derivative of a derivative. It has NO value at all.
And yet, I still make money on it...
Its a reasonable question that jaybaybaker is asking. When is the right time to trade gold back into fiatscos?
This isn't the first time gold has gone up (in relation to fiatscos). In the late 70's gold was stomped back down by Volcker raising interest rates through the roof. If I saw Bernanke do that, I would think twice about staying long gold. But Bernanke won't do that. He can't because the market is going up ask currencies around the wolrd are debased.
So when is the right time to sell gold? My parents say "as needed for living expenses".
What if a new currency was introduced that 99.99% of the world regained confidence in. A global reset followed by a new currency? If gold is an indication of distrust of fiatscos, then gold will also be an indication of trust in a new fiatsco.
We all know that after a global reset, TPTB will try and make people forget about gold again, and it will work for a hand full of decades again and I will be dead. I plan to enjoy these gains someday by converting back to fiatscos.
Anyone have any thesis on how to identify the "top" relative to purchasing power?
PS: I for one think that distrust will continue to grow for another 5 years at least.
Never trade gold (or silver) back into fiatscos. The only currency to trade into is one that is backed by gold, or gold and silver. Otherwise, trade your real money for your needs, or for other commodities that are undervalued at the time.
I look forward to trading my silver in for an apartment building. The timing should work out that when the precious metals reach their true value, the housing market should be tanking. Whatever amount of gold or silver that would buy one house now, will buy several then.
People are always going to need a place to live. They might as well pay me while they're at it. (Only, I might require payment in silver or gold.) (:
There isn't 5 years left. Most of us will be dead. The question is: How many scumbags can you take along for the ride?
+1 5 years is a long long time in today's economy!!!
I'd bet a nickel to a dollar that in 5 years we won't hardly recognize life as we know it today!!!