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Tiny Mauritius Tells US To Shove Its Dollar, Buys 2 Metric Tons Of Gold From IMF At $1,115 An Ounce

Tyler Durden's picture





 

The latest development in the gold bubble saga, and one which will likely cause the precious metal's price to spike even higher, comes from the tiny island of Mauritius which according to Dow Jones has purchased 2 metric tons of Gold from the IMF for $71.7 million. The price works out to approximately $1,115 per ounce. More as we get it. (and yes, this is a picture of Mauritius not some CNBC anchor hangout).

Some more from Dow Jones:


The International Monetary Fund announced Monday it has sold two tons of gold to the central bank of the Indian Ocean island of Mauritius for nearly $72 million.

The sale came as gold prices surged Monday to an all-time high of $1,136.72 per ounce.

The sale to Mauritius "was conducted on the basis of market prices prevailing on November 11, 2009 with proceeds equivalent to U.S. 71.7 million dollars," the IMF said in a statement.

It was the second such sale by the fund since September, when its executive board authorized the sale of 403.3 tons of gold from its holdings to bolster  its finances amid the global economic crisis.

On Nov. 2 it sold 200 tons of gold to the central bank of India for $6.7 billion.

The IMF said it would sell gold directly to central banks and other official holders for an initial period before selling the remaining amount on the open markets "in a phased manner over time."

The Washington-based IMF, which currently holds just over 3,000 tons of gold, is the third-largest official holder of the precious metal after the U.S. and Germany

 


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Mon, 11/16/2009 - 23:32 | Link to Comment D.O.D.
D.O.D.'s picture

ok, I'm through with merideth... [edit] Please let me be Fed Chairman of that Asset Bubble, I've got a stimulus package I'd like to inject into the market...

Mon, 11/16/2009 - 21:19 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

This is getting interesting.

BTW, the link above brings you to the CIA "World Factbook" web page for Mauritius. On a lark, I looked to see if the CIA has a listing on the Banana Republic of the United States of America. Bingo, sure does, though under the old name of United States. I thought the CIA wasn't a domestic operation?

https://www.cia.gov/library/publications/the-world-factbook/geos/us.html

Mon, 11/16/2009 - 21:44 | Link to Comment Anonymous
Tue, 11/17/2009 - 14:28 | Link to Comment Anonymous
Mon, 11/16/2009 - 22:44 | Link to Comment agrotera
agrotera's picture

I love the "factbook" !

Mon, 11/16/2009 - 22:57 | Link to Comment Miles Kendig
Miles Kendig's picture

Same here champ.

Mon, 11/16/2009 - 21:21 | Link to Comment Problem Is
Problem Is's picture

Wait.. Big chested gals in bikinis selling me (gold) investments...

Am I watching CNBC or reading ZH?

Oh I guess since I am receiving accurate information and the big chested gals in bikinis just happen to accompany the article....

Instead of the big chested gals in bikinis distracting me to sell me some worthless investment...

It must be ZH.

Mon, 11/16/2009 - 21:22 | Link to Comment Anonymous
Mon, 11/16/2009 - 21:51 | Link to Comment buzzsaw99
buzzsaw99's picture

+1

Tue, 11/17/2009 - 11:14 | Link to Comment Mad Max
Mad Max's picture

Good as tungsten!

Mon, 11/16/2009 - 21:22 | Link to Comment HedgeAccordingly
HedgeAccordingly's picture

Pretty nuts.. if they are wrong and are buying at the top of the market. bye bye little island.. some traders will probably buy you... You know kinda like renting a super tanker 2 store physical oil.. ya know creating an artificial shortage.. running up the price of the spot... i think you talked about this last week tyler. ha 

Mon, 11/16/2009 - 21:55 | Link to Comment Missing_Link
Missing_Link's picture

What's the chance that they could be wrong?  I do not see a viable scenario for gold coming down.  It seems to me to have very solid support.  That which cannot go down must go up.

Mon, 11/16/2009 - 22:22 | Link to Comment Howard_Beale
Howard_Beale's picture

Well let me count the ways you could be wrong since you are in a herd trade and I am long gold but at much lower levels:

1) You were a Southern Cal property buyer in 2005 and put no money down but hey, there is no way to go but up.

2) You loved the Nasdaq at 4000 and even more at 5000 in Mar 2000--because there was no way to go but up.

3) Oil looked like a screaming buy at $148 because there was no way to go but up.

I'll give you a viable scenario:

The stock market starts to tank since the Fed truly does not control it and the bear market rally ends. The dollar hits bottom and the greatest short squeeze of all time starts to take hold in a global de-risk trade. This continues for about a year--say 16 months like the first leg down in the stock market. Deflation truly takes hold even with the printing presses rolling. Gold retraces several hundred dollars as the Chinese, Indians, and every other country buying IMF gold feels a sense of ease that their dollar denominated debt is safe after all. That puts us to sometime in 2011---gold has retraced and languished.

Long term yes--there is support (unlike the tits that Robo posted on the close-up). But anything can happen in the next year and anyone piling in now is playing with the same bunch of sheep that are long the stock market and shorting the dollar. THREE very crowded trades. Can't wait for the squeeze to begin.

Mon, 11/16/2009 - 22:37 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

You know the number of similarities between the three trades you mentioned and gold? ZERO. Also, there's no guarantee that a rising dollar (dxy) will guarantee a falling gold. Just because one toilet paper is rising against some others doesn't mean gold will go down. Ironically, the real bubble right now is in bears.

Mon, 11/16/2009 - 22:43 | Link to Comment Anonymous
Tue, 11/17/2009 - 03:36 | Link to Comment FullMetalJacket
FullMetalJacket's picture

Ever charted gold in ZWD (or any other defunct currency)?

Tue, 11/17/2009 - 15:36 | Link to Comment Slewburger
Slewburger's picture

Yea like the Weimer Republic?

http://www.milliondollarbabies.com/GermanTimeline.htm

Check the parabolic behavior of paper/gld.

Tue, 11/17/2009 - 19:34 | Link to Comment Slewburger
Slewburger's picture

Also check the volume of notes being moved.

Mon, 11/16/2009 - 22:44 | Link to Comment Howard_Beale
Howard_Beale's picture

Cute GG....I have some bubble bath for my daughter in a bear bottle. I always appreciate your input and as I said, I am sitting on lots of coin. I think we can agree to disagree that the moonshot is a matter of timing in which I think is further out than you do. Best of all, we'll both be fine.

BTW, I am glad you answered my post. I am also long a great deal of silver and it is performing poorly until today. What is your position on that metal?

Mon, 11/16/2009 - 23:13 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

Both Gold and Silver are in a bull market, IMHO, and will outperform other commodities even as they rise generally. I do own some silver too - in fact, just bout some this weekend so that may have tipped the price :-) 

Mon, 11/16/2009 - 23:35 | Link to Comment Anonymous
Mon, 11/16/2009 - 22:45 | Link to Comment trav777
trav777's picture

yeah, dollar denominated debt is safe when the US is running annual $1T deficits.  This is absurd nonsense.

secondly, the DXY is a beauty contest between currencies, not as compared to real assets.  DXY can go to 200 and gold still hit 3000.

Look, think the scenario through...what does deflation due to debtors?  It crushes them.  Who is the largest debtor?  The US, Japan, and the UK.  This is the same duhnoshit argument that got me banned from tickerforum years ago.  If the US defaults, the dollar goes to zero.

There is no scenario in which the paper of a bankrupt state is "safe."  In fact, it gets less safe in case of deflation.  The US has no choice but to devalue, same as we did in 1933!  We *cannot* repay our debts, it's as simple as that.

Anyone who thinks the US is not a risk needs to have their head examined.

Mon, 11/16/2009 - 23:18 | Link to Comment Howard_Beale
Howard_Beale's picture

I am long gold so I don't need to have my head examined. And I have coin--bars--none of that ETF stuff. But I can tell you one thing:none of us knows what will happen and when. So chill out.

Mon, 11/16/2009 - 23:41 | Link to Comment Oso
Oso's picture

Howie + 100.  absolutely spot on.  anyone who tells anyone else that something can only go in one direction is a pig.  and pigs get slaughtered.

i got out of gold at 980 simply because i had too much company.

de-risking WILL cause gold to contract, probably violently.  question is not if, but when.  dont have the  answer there.

Tue, 11/17/2009 - 12:56 | Link to Comment chumbawamba
chumbawamba's picture

You got out at 980 because you didn't think it was hip to be in gold anymore?  Are there holes in the walls of your apartment when you repeatedly bang your head?

I am Chumbawamba.

Tue, 11/17/2009 - 14:33 | Link to Comment Anonymous
Tue, 11/17/2009 - 13:04 | Link to Comment pellucide
pellucide's picture

I agree. Something like the "Heisenberg uncertainty principle". The more people try to predict the outcome, the less predictable the outcome becomes.

So when its common knowledge that the gold is going to go up, Its less lilely to go up.

Tue, 11/17/2009 - 14:14 | Link to Comment faustian bargain
faustian bargain's picture

which turns it into a black swan event when it inevitably goes up.

Tue, 11/17/2009 - 02:32 | Link to Comment Anonymous
Tue, 11/17/2009 - 03:10 | Link to Comment A Man without Q...
A Man without Qualities's picture

+100

 

Though there may be a short term Dollar rally, the debt would drag it down.

Mon, 11/16/2009 - 23:42 | Link to Comment Anonymous
Mon, 11/16/2009 - 23:45 | Link to Comment deadhead
deadhead's picture

good to see  you back howard....

the dollar squeeze: there are so very many geopolitical events that could ignite this in a moment let alone financial matters that all here are aware of.  crowded trades are crowded trades and the beauty of them is that history shows that they all unravel, usually at an accelerated pace.

i've got no comment about gold pricing action except to say that it has been the best store of value for, say, several thousand years!

Tue, 11/17/2009 - 01:23 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

Nice long spiel, not one mention of the 1.25T of MBS that Bernanke is buying, not to mention the market sentiment that he will not be able to stop buying at 1.25T.

Any analysis of the USD without looking at what is backing the USD is incomplete.  Increasingly that backing is Fannie and Freddie MBS.

Tue, 11/17/2009 - 02:55 | Link to Comment Anonymous
Tue, 11/17/2009 - 07:12 | Link to Comment Anonymous
Tue, 11/17/2009 - 12:38 | Link to Comment Anonymous
Mon, 11/16/2009 - 22:12 | Link to Comment hack3434
hack3434's picture

If they are wrong then they can ask the US for a bail to avoid another "systemic collapse" 

Mon, 11/16/2009 - 22:39 | Link to Comment TomB
TomB's picture

It's only $71.7 million. That's chump change compared to the country's net foreign currency reserves of $2.9 billion.

Mon, 11/16/2009 - 23:07 | Link to Comment Anonymous
Mon, 11/16/2009 - 22:48 | Link to Comment Anonymous
Mon, 11/16/2009 - 23:03 | Link to Comment Lionhead
Lionhead's picture

Hedge Accordingly, your screen name is apt. You're likely hedging as you are a weak long or weak short. Run for the hills at the first sign of a pullback or advance. May I suggest you study the fundamentals & technicals behind the long gold/silver trade and why various investors & countries are buying the PM's. Gordon Gecko has been showing readers the astuteness of this investment. Will there be pullbacks & shakeouts? Yes, specifically to shake weak hands like you out of your positions. Especially in a market where demand is increasing and supply is diminishing. There is a finite supply of gold/silver; there is an infinite supply of paper & digital FRN's. Now, which asset would you want to hold in a banana republic sir?

Mon, 11/16/2009 - 23:40 | Link to Comment Lionhead
Lionhead's picture

HA, have a look at today's gold chart. Most bullish I'd say:

http://www.zerohedge.com/forum/us-dollar-interest-rates-gold-charts#comm...

 

Tue, 11/17/2009 - 01:22 | Link to Comment Anonymous
Mon, 11/16/2009 - 21:23 | Link to Comment RobotTrader
RobotTrader's picture

Here's a closeup....

 

Mon, 11/16/2009 - 21:29 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Robo, I thought you promised mom you wouldn't take any more pictures of sis without her agreement?

Family resemblance anyone? No, not the face. If you're even looking at the face. Something else.

Mon, 11/16/2009 - 21:31 | Link to Comment D.O.D.
D.O.D.'s picture

That is a very nice beach...

Tue, 11/17/2009 - 11:41 | Link to Comment geopol
geopol's picture

That is a very nice beach...

 

Thats what jumped out at me ...Especially the beach break..

Tue, 11/17/2009 - 13:49 | Link to Comment D.O.D.
D.O.D.'s picture

You can almost feel that sand in your toes cantcha?

Mon, 11/16/2009 - 22:47 | Link to Comment molecool
molecool's picture

Actually, they don't look like silicone - those are good old fashioned big ass titties :-)

Tue, 11/17/2009 - 13:10 | Link to Comment chumbawamba
chumbawamba's picture

Yep.

I am Chumbawamba.

Mon, 11/16/2009 - 23:42 | Link to Comment Cursive
Cursive's picture

Oh, the back problems she must have.  Her suffering is for all of us.

Tue, 11/17/2009 - 00:06 | Link to Comment Careless Whisper
Careless Whisper's picture

@swgprop    .............eeewwwwwww

 

Tue, 11/17/2009 - 02:00 | Link to Comment SRV - ES339
SRV - ES339's picture

Thanks swgprop... who knew inflation was such a problem in Russia?

Tue, 11/17/2009 - 11:43 | Link to Comment geopol
geopol's picture

WOW! Cargo nets..

Mon, 11/16/2009 - 23:19 | Link to Comment Problem Is
Problem Is's picture

Tyler's girl has that beat... hands down... I mean hands up.

Tue, 11/17/2009 - 06:10 | Link to Comment Renfield
Renfield's picture

BORRRRINNNGGG!!!!!

Robo, appreciate your comments, man, but DAMN.

Where's the beef??

http://4.bp.blogspot.com/_j1oIj9F_YMM/RpE6Ftj65OI/AAAAAAAAAx8/WQuUE_4msRA/s400/Aussie+Lifeguard+twins+01.jpg

Tue, 11/17/2009 - 07:51 | Link to Comment MsCreant
MsCreant's picture

Beachin' fer shur.

Little boys, want some candy?

Tue, 11/17/2009 - 18:26 | Link to Comment Renfield
Renfield's picture

hehehe...their name is 'Gemini'. Or sometimes 'Thing 1 and Thing 2'.

The boys loves them some candy.

Twins are great at the beach, where everyone loves a good tasty sandwich.

Tue, 11/17/2009 - 23:08 | Link to Comment MsCreant
MsCreant's picture

This ain't beach but I know gold when I see it. I think you and I will have no conflicts on this one at all.

http://oneasianworld.com/blog/tyson.jpg

Tue, 11/17/2009 - 23:31 | Link to Comment Renfield
Renfield's picture

OH. MY. GOD.

I didn't think they made boys that...perfect anymore. No, wait. That achingly, stunningly, salaciously, mouthwatering ambrosial anymore.

Was he not at a beach? I kinda don't remember anything much after seeing that picture.

sigh...I am not at a private terminal right now, alas! can't post anything else 'til I'm back home. (Goddam corporate 'safe' defaults!) My eyes are still blinded anyway...good thing I have shades for the trip home!

Mon, 11/16/2009 - 21:30 | Link to Comment anynonmous
anynonmous's picture

one troy ounce per night* (but if you book by midnight  Ted Anderson will hold the room at last weeks closing price)

 

http://www.oneandonlyresorts.com/flash.html

 

*for stays between November 20 and November 30, 2009 three night minimum (all rates quoted per night per suite)

Mon, 11/16/2009 - 21:32 | Link to Comment Millivanilli
Millivanilli's picture

Girl, you know its true.

Mon, 11/16/2009 - 21:32 | Link to Comment CB
CB's picture

that settles it, I'm moving there.

Mon, 11/16/2009 - 21:35 | Link to Comment buzzsaw99
buzzsaw99's picture

Outstanding. Tell Ben Bernanke to take his clownbux and shove them where the sun don't shine.

Mon, 11/16/2009 - 21:36 | Link to Comment The Rock
The Rock's picture

All I know is that if stupid asses like Kudlow and Cramer are telling everyone to buy Gold, then I'm heading for the hills...

Mon, 11/16/2009 - 23:10 | Link to Comment Problem Is
Problem Is's picture

Kudlow's coke dealer is probably tired of Kudlow's kited checks and wants Krugerrands from Larry now...

Hence, Larry is bullish on gold...

Mon, 11/16/2009 - 22:20 | Link to Comment George Washington
George Washington's picture

Beautiful wildlife ...

Mon, 11/16/2009 - 21:42 | Link to Comment trav777
trav777's picture

But...but...I thought deflation and the priceless strong dollar were gonna happen?  Don't tell Doucheinger and Mish lol

 

Artificial shortage on oil?  with tankers?  on 85mbdp consumption?  ROTFL...you'd need 40 VLCCs per day

Mon, 11/16/2009 - 21:48 | Link to Comment Anonymous
Tue, 11/17/2009 - 01:27 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

I actually read KD's blog today, along with some of the comments - hilarious.  Basically KD says "just wait until the dollar carry trade comes undone, the fallout will be enormous", then his disciples get on the message board and say "Genesis, what we cause the carry trade to end?", and he replies "Oh, just wait, it will be something unforeseen, and it is gonna be huge.".

Pure hilarity.

To his credit, he does harp on about the Fed illegally buying Fannie/Freddie MBS, but then fails to connect the falling dollar to those purchases.

Tue, 11/17/2009 - 04:30 | Link to Comment Renfield
Renfield's picture

I LIKE Denninger!

C'mon, he does a wonderful job of unmasking the fraud, you gotta admit. Right up there with Zero Hedge. (Well, close. And there's just one of him whereas Marla has Tyler to help out....)

He has some kind of mental block on gold, don't know why. Maybe his dad lost a pile on long gold during the Volker days or something, my theory. But it's obviously some kind of emotional thing which, you know, we're each entitled to as long as we make up for it in other ways...

But if you read him for the right reasons (maybe not for advice on gold/USD/forex), he is one of the more astute commentators out there! I think they could use some of his Tickers as evidence in (God Willing) the future TRIALS of some of these legislators, Treasurers, and fatass corporates.

We don't have to agree 100% with who we read, still to get the benefit of what they have on straight, I think.

I must admit I feel sort of bad for him b/c I can relate to his rage and disappointment when the institutions he expects to do their job, and uphold what is (was) great about the US, turn out to be so badly corrupt. I'm kind of with him on that. I think this is what makes him so astute on the fraud, his rage about what SHOULD be, his expectations that at least once 'they' will do the right thing.

Tue, 11/17/2009 - 07:59 | Link to Comment MsCreant
MsCreant's picture

Good post. Karl is a little too stiff about what you can and cannot say in his comments section, another emo trigger, but it is obvious his intent, heart, and mind, are in the right place. He works harder on these issues than most of us posting here do. We are lucky he is crazy like that? Mish though a deflationist I do not always agree with (inflation/deflation construct is out the door, too binary for emergent realities which must include sooo much intervention) is always fighting the good fight and a sweetie to boot.

Tue, 11/17/2009 - 13:18 | Link to Comment chumbawamba
chumbawamba's picture

Karl is an idiot and nothing more.

I am Chumbawamba.

Tue, 11/17/2009 - 18:35 | Link to Comment Renfield
Renfield's picture

MsCreant

Nice to hear from one person who agrees! Meh, it's not worth having a blue with half the blog over, but to me even so, 'the enemy of my enemy' etc. One thing I appreciate about Mish, is that despite his very public disagreement with Peter Schiff - and he has taken it to Schiff more than once over inflation/deflation - he had the integrity to endorse wholeheartedly Schiff's run for Congress.

Mish is big on gold and no fool - I agree that inflation is very much what's going on here, all around the world in a fiat collapse, but am also aware that in countries where hyperinflation has taken root, it has been preceded by deflation first. There's where, in my opinion, Mish comes in; in the big picture Mish and Schiff might be in more agreement than it would seem. He hasn't pointed out any deflation in Australia, for instance, b/c here there just isn't any.

As for Denninger, I am grateful to the man for the education I receive on his blog, as I am grateful to ZH and to so many here. I don't agree with him about fiat money and I suspect he has an emotional mental block on gold...so I don't participate on the forum, just read and learn and am happy with that...

Tue, 11/17/2009 - 11:27 | Link to Comment trav777
trav777's picture

Agreed...he banned all the people who "foresaw" it.

Just wait, the notes of a BK nation are going to be priceless...PROMISE YOU

His forum is a cult of people who exist to kiss his ass.  Dude has been wrong wrong wrong about all the measures the Fed would pull.

The problem with Mish and KD is they actually expect these people they DAILY call crooks and frauds and liars to follow the RULEZ.  It's a very childish naivete, really.

The endgame in case of deflation would be very swift.  The decline in tax receipts would very rapidly crush the government.  They couldn't even pay the INTEREST on existing debt.  Everybody who can add can do this math and knows the outcome.

Mon, 11/16/2009 - 21:47 | Link to Comment J.B. Books
J.B. Books's picture

Just big enough for my pickup truck 

Mon, 11/16/2009 - 21:48 | Link to Comment TomB
TomB's picture

What's the source of this news?

Mon, 11/16/2009 - 21:59 | Link to Comment TomB
TomB's picture

Found it: http://www.imf.org/external/np/sec/pr/2009/pr09413.htm

 

Oddly enough, according to Google this news is over 17 hours old?

Mon, 11/16/2009 - 22:50 | Link to Comment CB
CB's picture

the media wears blinders (or some such version of media idiocy)

only place I had found it was zerohedge & the IMF website press release page.  Goldseek just now posted it. 

 

Mon, 11/16/2009 - 21:57 | Link to Comment Anonymous
Mon, 11/16/2009 - 22:14 | Link to Comment Miyagi_san
Miyagi_san's picture

 is Tungston going up AH ...had to zoom 200% to see

Mon, 11/16/2009 - 22:14 | Link to Comment bugs_
bugs_'s picture

That ain't tungsten.

 

Mon, 11/16/2009 - 22:19 | Link to Comment TomB
TomB's picture

According to Wikipedia the country previously had 1.9 tons of gold, with this purchase they more than doubled their gold reserves.

Mon, 11/16/2009 - 22:28 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

Looks like the run for the exits from the USD has started. India just yelled "fire" in the packed dollar theater. BTW, it's not a gold bubble, but an imploding dollar bubble. This is exactly what it should look like - a bubble in everything else, especially Gold.

Mon, 11/16/2009 - 22:51 | Link to Comment Anonymous
Tue, 11/17/2009 - 07:02 | Link to Comment Renfield
Renfield's picture

'India just yelled "fire" in the packed dollar theater.'

HAHA!!! Yes and Mauritius just took off running with one of the water buckets...

Mon, 11/16/2009 - 22:29 | Link to Comment ChickenTeriyakiBoy
ChickenTeriyakiBoy's picture

look mauritius has done pretty well for itself. but is it smart money? 

 

what's the chance that they could all be wrong? i don't know but i could point you to a few municipal pension funds in scandinavia no longer asking themselves the same question. yes i see gold appreciating markedly over the next several years, and i think the support will be even more solid when inflation actually begins to occur. but the arrogance in this trade is really starting to bother me. yes i traded silver over the past few days and did very well, after losing a little on a gold short the previous week. that's dbs, not physical, and i didn't have to wait on fedex. i'm not going to say this with the same tone of arrogance and self-assuredness as all the 2k-gold-by-february people, but i really do think there will be a little correction here

Mon, 11/16/2009 - 22:41 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

John Paulson, Paul Tudor Jones, Andrew Hall, George Soros - would that satisfy your definition of "smart money"? Or do you think you are smarter than those guys? The real arrogance is in the "dollar will soon rise spectacularly" trade even though it's TOILET PAPER.

Mon, 11/16/2009 - 22:47 | Link to Comment Anonymous
Tue, 11/17/2009 - 00:05 | Link to Comment MsCreant
MsCreant's picture

So why post anon, let us see who you are and celebrate how smart you are, with you? Seriously.

Tue, 11/17/2009 - 03:51 | Link to Comment Renfield
Renfield's picture

And when he shows us his, we also promise not to laugh. Or at least not to point when we do.

Tue, 11/17/2009 - 12:43 | Link to Comment callistenes
callistenes's picture

I don't know but GG seems like anything but emo to me.

Tue, 11/17/2009 - 13:22 | Link to Comment chumbawamba
chumbawamba's picture

GOLD BITCH!!!

I am Chumbawamba.

Mon, 11/16/2009 - 22:51 | Link to Comment ChickenTeriyakiBoy
ChickenTeriyakiBoy's picture

yeah of course i respect all those guys. no i don't think i'm smarter than them. but i wonder how many of them are buying right now, that would be more interesting to know than the contents of a 13-f filing from a month or two ago. it's one thing for them to keep talking, puffing up their current holdings by staying in the media with bullish predictions. but if some shit gets in the fan, i doubt guys like that would be so purely ideological about the sanctity of gold. don't forget david einhorn.

Tue, 11/17/2009 - 01:33 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

Honestly GG, I could give a shit about what the "smart money" is buying and what others on this board think, so far not a single person on this board or anywhere has demonstrated how Zimbabwe Ben is going to stop his purchases of Fannie/Freddie MBS, and how, in the face of his continued purchasing and the increasing backing of the USD by those MBS, it has any chance of rallying.

We've been right for months, and trust me, will be right for many more months.  I stand by my prediction - gold will be well over $2000 by mid-next year.

Tue, 11/17/2009 - 02:53 | Link to Comment Assetman
Assetman's picture

Your prediction on gold being at $2,000 in several months may well be right.

But while the Fed has committed itself to buying Agency MBS and debt full bore until next Spring, I can guarantee you the Fed is very worried about dollar devalutaion getting out of hand.

The really sad part of that story is that the Fed may be defenseless if they allow the dollar decline to turn into a dollar rout.  The best course might be engineering another safety trade, as the MBS program unwinds-- and justify another toxic debt purchase program while the market is in panic mode.

But, the other option is they might be stupid, er... they might be blinded by "printing at all costs".  If they continue their bad assets way, these folks in Washington will be playing some very dangerous games with our currency, and it may turn out a whole lot worse than most can imagine.

Tue, 11/17/2009 - 03:55 | Link to Comment Renfield
Renfield's picture

Do you think, though, they have in mind that the DXY was at, what, 72 earlier in the year?

So, if they managed through that, then 75 isn't that bad...especially considering there seems to be some global support at that level. The USD can't be routed too quickly, without the global community doing some serious diversifying first, right?

So I would think they wouldn't get too anxious until it fell to at least a 12-month low, would they?

(This is from memory - haven't checked the figures due to a slow internet connection so I hope I have them right.)

Tue, 11/17/2009 - 12:47 | Link to Comment callistenes
callistenes's picture

Yep just like gas prices. They flog you with $4 a gallon and suddenly 2.75 to 3 doesn't seem so bad. We have been programmed.

Tue, 11/17/2009 - 12:56 | Link to Comment Assetman
Assetman's picture

Renfield... yes, you are right about that.  The Fed can let the DXY get to the 71-72 level before it breaks support and all hell breaks loose.  That's only about a 5% devaluation from current levels.

Given the rate of declines we've seen, that might buy another 2-3 months worth of time.  That seems to coincide pretty well with the winding down of the MBS purchase program.

Tue, 11/17/2009 - 02:29 | Link to Comment Apocalypse Now
Apocalypse Now's picture

You shorted gold, and you talk about ARROGANCE?  What makes you think you can time this?

We have reached a tipping point where over the long term the US government is taking in less and less in tax revenues while their budget continues to grow (causing a larger deficit).  If the dollar strengthens, gold may not even correct - all the central banks are buying gold and it is becoming more and more rare as the major veins have been found, why would you want to give your money away?  Options are for writers premiums, trust me.

I understand the potential for a stronger dollar for a short term possible pop if you wanted to get contrarian and "outthink/beat the system" (as other currencies are also debasing and may be worse off than the US), but I think gold may have decoupled and backwardation is possible.  I am also struck by poor earnings on major silver producers with record high silver prices - it would appear it is costing too much to extract silver - you know the old supply/demand curve.

Tue, 11/17/2009 - 08:52 | Link to Comment ChickenTeriyakiBoy
ChickenTeriyakiBoy's picture

I trade dude. Win some lose some. Am I the only one who ever takes a loss? 

 

Maybe my gold short was hedging another trade I had going? 

Tue, 11/17/2009 - 18:43 | Link to Comment Renfield
Renfield's picture

Mr Now:

Fundamentals (supply/demand) may at last be re-entering the investment picture here.

The powerz will do their best to cloud this simple issue with paper, as usual, but it looks like what worked for awhile in the past may have run its course.

Smell that? You smell that?...Nothing in the world smells like that.

Mon, 11/16/2009 - 22:33 | Link to Comment curbyourrisk
curbyourrisk's picture

Gold filled with Tungsten?

Mon, 11/16/2009 - 23:13 | Link to Comment Problem Is
Problem Is's picture

Yeah... like ethanol stretching regular gas...

Makes perfect sense to me and Ben...

Mon, 11/16/2009 - 23:46 | Link to Comment Anonymous
Mon, 11/16/2009 - 22:35 | Link to Comment Anonymous
Tue, 11/17/2009 - 02:27 | Link to Comment Problem Is
Problem Is's picture

"There is no doubt that the source of the "tungsten" is the Bank of England."

That's funny... the Bank of England says the source has to be the Bank of NY...

American smelters simply lack British ethics, you know...

Mon, 11/16/2009 - 22:43 | Link to Comment Anonymous
Mon, 11/16/2009 - 22:50 | Link to Comment Anonymous
Mon, 11/16/2009 - 22:54 | Link to Comment trav777
trav777's picture

Gold is in supply decline...peak production was achieved in 2000.  This is well-published data, though apparently little-known by the self-proclaimed brilliant deflationists.

If the US had a solvent balance sheet, we could tolerate deflation.  Last I checked we were $12T in the hole give or take depending upon the true state of the Fed's balance sheet marks. 

Deflation means falling incomes and falling revenues and falling everything...how in the hell could the gov pay the INTEREST on this debt, which is now the 4th or 3rd largest budget line item (and rising) in the event of significant deflation?  Already we are looking at receipts covering only 1/3 to 1/2 of outlays and this picture shows no signs of other than continuing deterioration against a bleak fiscal picture in terms of entitlements and war spending (health care anyone?).

Deflation is a fast-track to sovereign default.

Years ago, I predicted Japan would default in 2009; looks like I may be off by a year or two, but somebody is going down.  The debt loads are untenable.  You show me how this comes out rosy for the dollar if deflation caused receipts to fall below interest outlays.

Mon, 11/16/2009 - 23:03 | Link to Comment lsbumblebee
lsbumblebee's picture

This just in: Tiny Mauritius has been selected for nuclear testing according to Pentagon officials. A spokesman for the State Department has declared the island suitable for measurements of radioactive activity due to it's location. The government of Mauritius has one week to respond.

Here's Steve Liesman with the weather.

Mon, 11/16/2009 - 23:46 | Link to Comment Cursive
Cursive's picture

LOL.  This is the future.

Tue, 11/17/2009 - 03:57 | Link to Comment Renfield
Renfield's picture

It's funny b/c it's true! :-)

Mon, 11/16/2009 - 23:18 | Link to Comment Anonymous
Tue, 11/17/2009 - 12:53 | Link to Comment callistenes
callistenes's picture

You answered your own question. "What do they care if it goes down some?"

They are worried it will go down a LOT!

Mon, 11/16/2009 - 23:33 | Link to Comment Anonymous
Tue, 11/17/2009 - 00:42 | Link to Comment lsbumblebee
lsbumblebee's picture

Yeah I heard that and I wanted to puke in his face. Who cares if we're just sheep as long as we're fed and have a place to sleep?

Funny how The General Electric Channel has Gartman on the show every time gold makes a spectacular move up. It's like he's there to explain how this is an anomoly and go back to bed everybody.

 

Mon, 11/16/2009 - 23:36 | Link to Comment CB
CB's picture

I wonder where Mauritius will store it?

Interestingly, there's also an IMF assement letter on Mauritius:

http://www.imf.org/external/pp/longres.aspx?id=4385

Mon, 11/16/2009 - 23:39 | Link to Comment Arthur
Arthur's picture

And if you are into gold, careful if you are holding the GLD ETF.

   "Excerpt from the GLD prospectus on page 11:

http://www.spdrgoldshares.com/media/GLD/file/SPDRGoldTrustProspectus.pdf

Gold bars allocated to the Trust in connection with the creation of a Basket may not meet the London Good Delivery Standards and, if a Basket is issued against such gold, the Trust may suffer a loss. Neither the Trustee nor the Custodian independently confirms the fineness of the gold bars allocated to the Trust in connection with the creation of a Basket. The gold bars allocated to the Trust by the Custodian may be different from the reported fineness or weight required by the LBMA’s standards for gold bars delivered in settlement of a gold trade, or the London Good Delivery Standards, the standards required by the Trust. If the Trustee nevertheless issues a Basket against such gold, and if the Custodian fails to satisfy its obligation to credit the Trust the amount of any deficiency, the Trust may suffer a loss. "

 

This quote was  lifted from an interesting article on the tungsten issue.  The article can be found at: http://www.marketoracle.co.uk/Article14996.html

Almost like holding some mortgage back securities.  What are the darn things worth?  I suppose if its true, "real gold"  will really spike - but go trade the stuff.

Mon, 11/16/2009 - 23:44 | Link to Comment Anonymous
Mon, 11/16/2009 - 23:45 | Link to Comment rhinotrader
rhinotrader's picture

Do you have any idea how hard it is to explain to that girl that you are "short" and that I will be rich soon? It is very difficult!    I am getting made fun of bigtime for staying short by our risk manager. TRADERS PRAYER... " God please get me out of this short and I will never go anything but long from now until eternity".

Mon, 11/16/2009 - 23:48 | Link to Comment LuisvonAhn
LuisvonAhn's picture

Maybe someone can educate me. I am of the belief that gold is a non consumable resource. Roughly the amount taken out of the ground equals the amount possessed today, minus a few fillings and bottles of Goldschlager. And it isn't freely traded but horded. So the value built into its price is not for consumption but for storage of wealth. So when someone sells gold form their stores it only goes into the buyers stores. No destruction of supply.

Now gold hit a recent bottom in 1999 and has only gone up in the last 10 years. And if I look at the data points 3/08, 3/09, 11/09 the DXY was at (est.) 78, 89, 74 respectively and for GLD was at (est.) 87, 92, 110 respectively how is it assumed that a fall in dollar can be contributed to a rise in the price of gold. Other correlations go further back than 3/08. From 1/98 to 3/02 the dxy shot up but gold traded sideways.

I don't understand all the talk about gold going up only because of the declining dollar. It seems to me that it is only speculation, which is fine by me. Frankly someone very smarter than I always told me to follow the silence and not follow the talk. I heard a lot of talk about tech stocks, real estate, oil and now gold. But as I said, maybe someone can help educate me.

 

Tue, 11/17/2009 - 00:15 | Link to Comment dark pools of soros
dark pools of soros's picture

my simple boiled down approach is that, yes there is the uncertainty of US dollar/fiat going to hell so there is the knee jerk reaction to go grab SOMETHING besides ammo and water which gold has been there forever....  and then you have the quick to take advantage crowd who will pump this fear 10 times or more higher without any care if it can skyrocket or not.. they are making $$$ in the now on fears of the future  - and THAT practice has been going on for just as long as gold has been around as currency..

 

 

Tue, 11/17/2009 - 04:13 | Link to Comment Renfield
Renfield's picture

"I don't understand all the talk about gold going up only because of the declining dollar."

Not true. Check out the Aussie charts (one of the perceived 'stronger' currencies these days, it seems) over the last couple months.

http://goldprice.org/gold-price-history.html

Gold is rising in ALL currencies, predominantly due to demand/buying, these days. Only not as dramatically as in USD.

In Kitco's 'weighted currency' index, gold is nudging its all-time nominal high (look at the one-year chart on the webpage):

http://www.kitco.com/kitco-gold-index.html

And that is 'nominal', neither inflation-adjusted nor using John Williams' (shadowstats) numbers.

In other words, gold has a long way to run.

I am long gold/silver but not b/c it's not so much that I'm in the church of gold, as that I can't see a trend when it's right in front of my nose. And understand the reasons for it.

I'll drop gold or any other investment the second it looks like there's a viable currency alternative that will take over as, (Bonner's words) 'the trade of the decade'.

But in the meantime, I think one must be deep in the Faith In the Power-That-Be to think that any pure fiat currency is going to come out of this as a winner. The OECD countries are deeply, irrevocably in debt, and the toxic assets that form the foundation of the OECD currencies are on the nose with the 'third world' creditors countries.

And no, despite being Aussie, I don't believe in the sustainability of the Chinese 'boom'.

Tue, 11/17/2009 - 06:03 | Link to Comment SRV - ES339
SRV - ES339's picture

Solid precious mineral miners are moving in multiples of 2 to 5 times gold

Tue, 11/17/2009 - 18:52 | Link to Comment Renfield
Renfield's picture

Hey SRV

True, and nowhere are people (well, some people) more aware of this than Aus all right.

However, much as I agree that miners are a good investment generally right now, it's not as 'safe' as owning metals themselves. So much depends on the mine itself, knowing about its production, its history, its owners, its balance sheet. You could wind up with a Barrick, for instance, or a Bre-X...

Plus, as I continually point out to people here, there is a production 'boom' going on right now, largely fuelled by China, that may or may not last.

While in the long term miners are still good, they may be in for some rocky times if (when?) the Chinese boom falters.

So, yes good investment, but risky. We better know what we're doing when buying the mines.

 

Mon, 11/16/2009 - 23:48 | Link to Comment Anonymous
Tue, 11/17/2009 - 02:01 | Link to Comment Burnbright
Burnbright's picture

Your funeral pal.

Tue, 11/17/2009 - 18:53 | Link to Comment Renfield
Renfield's picture

Silver silver burning bright:

I had to read that post 2 or 3 times, but I think he's actually in agreement with you...

Mon, 11/16/2009 - 23:51 | Link to Comment Anonymous
Tue, 11/17/2009 - 08:01 | Link to Comment Anonymous
Tue, 11/17/2009 - 11:40 | Link to Comment trav777
trav777's picture

This is what happens when you ban every dissenting opinion and self-create an echo chamber.

Doucheinger COMPLETELY missed the Fed printing, despite being told by people far smarter than he that it would happen.  He said the Fed would not put the gun in its mouth and if they did "bondzilla" would smack them down.  ROTFL

Yet still his acolytes cling to the "deflationary vortex" theory...black holes on balance sheets swallowing imaginary money. Douche doesn't "believe" in peak oil either.  Total LOL there as anyone with a brain can rattle off half a dozen nations that have peaked (54 of the top 65 actually have).  If a REGION of the earth can peak, doesn't it follow by induction that the earth can peak too?

The dude threatened to put TOD on the banned sites list on TF.  TOD!  I mean that site is beyond comparison as far as having levels of real research and data that will blow your mind right outta your head on a constant basis but because some article there made claims about the unit cost of algae biofuel that KDouche didn't agree with, he threatened to ban the damn site unless the poster referencing it didn't delete the link!  Total WOWZA. TOD is a place real geologists hang out and talk about real oil wells.

The funniest thing about TF is the penis envy they have of ZH.

TF is a great place to go if you want to read "skullfucked" and hear mantric deflation chants, but if you want real scoops, real analysis, real data, ZH, TOD blow that crackden out of the water

Mon, 11/16/2009 - 23:52 | Link to Comment ChickenTeriyakiBoy
ChickenTeriyakiBoy's picture

i'm calling a bubble in the gold-plated tungsten story. mark the day

Tue, 11/17/2009 - 00:02 | Link to Comment Anonymous
Tue, 11/17/2009 - 00:06 | Link to Comment dark pools of soros
dark pools of soros's picture

are you trolling?  everyone knows the IMF likes to flood the market to keep the price down...  i wouldn't be surprise if they have some swindle lined up to acquire more gold by artificially inflating some other worthless 'security' so as to buy more of the real deal 

Tue, 11/17/2009 - 00:20 | Link to Comment JamesBrrando
JamesBrrando's picture

must be that tungsten gold

Tue, 11/17/2009 - 01:03 | Link to Comment JamesBrrando
JamesBrrando's picture

thats a solid point. If i had something "valuable" the last thing i would be doing is selling is for paper crap. I'd let demand build by "peeling" my supply

(bud dealers do that, lol)

I'd horde Gold until i had too much and the price was 10k per oz, with buyers lined up to pay.

WHy sell all my Gold at 1045-1115, unless I had some other motive.

Tue, 11/17/2009 - 02:02 | Link to Comment Burnbright
Burnbright's picture

Because technically the gold didn't really cost them anything...just think about it.

Tue, 11/17/2009 - 08:13 | Link to Comment MsCreant
MsCreant's picture

That got under my skin too. I felt like "hey, who gave you that?" Like a kid who needs money for their rent in college, you help out, and then they turn around and buy candy, beer, and magazines with it.

Tue, 11/17/2009 - 13:55 | Link to Comment chumbawamba
chumbawamba's picture

And worst of all, porn!

I am Chumbawamba.

Tue, 11/17/2009 - 18:56 | Link to Comment Renfield
Renfield's picture

Yo, if guys don't get sex they gotta get pr0n, or else it falls off...this is a NEED dude. Don't be hatin on pr0n...

I bet the IMF clones are big, big buyers of the Forbidden Fruit. ;-)

Tue, 11/17/2009 - 00:03 | Link to Comment dark pools of soros
dark pools of soros's picture

how much is the going rate for metric pounds of Mauritius Booty??

Tue, 11/17/2009 - 00:32 | Link to Comment Spitzer
Spitzer's picture

The bubble is in FIAT MONEY, not GOLD and when it bursts you get hyperinflation.

 

Just when the sheeple thought they had this bubble thing figured out....

Tue, 11/17/2009 - 02:00 | Link to Comment A_MacLaren
A_MacLaren's picture

+100

and the Fiat Fairy waved its fake wand and created another $5 Trillion.

Tue, 11/17/2009 - 00:35 | Link to Comment fireangelmaverick
fireangelmaverick's picture

I don't know TD, it looks the girl has got 2 metric tons of Gold right on her chest? Who wants to blow that bubble?

Anyone ? Anyone at all?

Tue, 11/17/2009 - 00:51 | Link to Comment fireangelmaverick
fireangelmaverick's picture

I don't know TD, it looks the girl has got 2 metric tons of Gold right on her chest? Who wants to blow that bubble?

Anyone ? Anyone at all?

Tue, 11/17/2009 - 01:03 | Link to Comment Anonymous
Tue, 11/17/2009 - 14:01 | Link to Comment chumbawamba
chumbawamba's picture

We don't do precious metals in avoirdupois ounces.  1 ounce troy = 31.1g.

I am Chumbawamba.

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