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What Does The SPR Release Mean For Gold Trading

Tyler Durden's picture





 

Is it a coincidence that the government announced the release of crude from the SPR just days after it was disclosed that Dodd-Frank will make trading in OTC spot products illegal? Perhaps. On the other hand if there is indeed a concerted and very politicized effort by the government to encroach and "centrally plan" yet more industries, the implications for precious metals trading could be substantial. FMX Connect summarizes these as follows: "Our two cents are as follows. It does not pay to fight the government right now. Even though Bernanke can’t print more oil it is clear that we are entering into a new phase of a centrally planned economy. To us this smacks of price controls. When you combine it with the Dodd-Frank bill prohibition of OTC gold trading, you might see that we are setting up for something worse. Tin Foil Hat Alert: All gold will trade through exchanges and while we don’t think ownership will be prohibited it may be taxed to death."

Full note from FMX Connect:

Summary

August Gold settled at $1500.9 per troy ounce, a loss of $19.60 for the day.  Volatility was bid in the selloff with put buyers overwhelming the market and speculators liquidating calls.

Market Recap:

Today's option activity showed the other side of Gold's bipolar nature. We’ve mentioned it many times before, that the back half of the curve is dominated by call buying speculators while the front part of the curve is the domain of GLD hedgers. Before today’s selloff a prop shop purchased the 1400/1450 1by2 put spread. They bought the 2 and sold the 1. The structure actually sold vol., But by the end of the day, even with volatility higher the seller was profitable. This is entirely because the market moved heavily towards a put skew. We would expect more of the same if the market continues to sell off. One should expect volatility to back off aggressively if we bounce. We feel the call buying in October will dry up and straddles there are a sale. December however will retain speculative interest.

We stated two days ago that precious metals were on our radar for a major selloff. Our indicator proved correct and gold capitulated yesterday. If the indicator remains true to form, this market could see 1460 in a week. Regardless it’s given us $40 of downside already.

Interestingly enough, Silver did not trigger its alert until today's close. We would say that while gold has been the weaker of the two metals in this selloff, silver may be catching up next week.

Comments on the SPR Release

President Obama with coordination from the IEA agreed to release oil from the SPR in an attempt to quell concerns about high gasoline prices. This has been discussed ad nauseum. We would like to put in our two cents. First, as many already have said, any oil that is sold now, must be bought back later. Second, from the opposite point of view, the government can buy it back whenever it wants. Therefore, from this, it is not that bullish, as there is no imperative to buy back the oil anytime soon. As a side note, our Government could have been selling puts and or selling call for years to create revenue on an otherwise inanimate object sitting in the ground. We think they are generally lacking commodity risk.

Our two cents are as follows. It does not pay to fight the government right now. Even though Bernanke can’t print more oil it is clear that we are entering into a new phase of a centrally planned economy. To us this smacks of price controls. When you combine it with the Dodd-Frank bill prohibition of OTC gold trading, you might see that we are setting up for something worse. Tin Foil Hat Alert: All gold will trade through exchanges and while we don’t think ownership will be prohibited it may be taxed to death.

Directional Commentary:

Options: The emotional indicator continues to switch from greed to fear as GLD related put buying has spread from July through October while traditional speculative call buying has withered away. Many would interpret this as bearish and we wouldn't disagree. But all that says that if we rally back vol. will get hammered and if we selloff vol. will explode. In either direction, calls will not be invited to the party. Options Conclusion: Bearish

Technical's: Gold is oversold right here. It has had two monster down days, breaking through its long term trend line and its 50 day moving average, a important touchstone for the last year. A bounce should be forthcoming. We would pick spots and lean into it as long as the market remains under 1518. Our target is 1460 with a stop at 1520. Technical Conclusion: Bearish, Short Term: Bullish

clip_image002

 

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Active Options

N1500 call

N1520 call

Q1400 put

Q1450

 

 ATM Volatility Curve:

image

As of 4:00 P.M.

 

Volatility Smile:

image

***From NYMEX Settlement

 


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Fri, 06/24/2011 - 18:11 | Link to Comment Iam_Silverman
Iam_Silverman's picture

"What Does The SPR Release Mean For Gold Trading ?"

That soon they will be"releasing" gold from Fort Knox?  In an attempt to drive the price down for the consumer?

Fri, 06/24/2011 - 18:20 | Link to Comment fmxconnect
fmxconnect's picture

All ready done and shorted by all the TBTF banks. Thank robert Rubin for creating the idea 20 years ago.

Fri, 06/24/2011 - 19:31 | Link to Comment IQ 145
IQ 145's picture

 "What does the Release mean for Gold Trading?"; very little; and the little that it meant is already done. There won't be any $1460 gold in a few weeks; silver made a beutiful multi-month double bottom today; nice buying opportunity. Pm's will trade up next week. It's just static.

Fri, 06/24/2011 - 20:31 | Link to Comment rocker
rocker's picture

Like your IQ on this one. The reaction in Gold and Silver from the Oil Smack Down is just about done. Most who were long Oil on margin had to sell everything. Just like they did when the dollar reversed on them. All of this is creating opportunities for real investors.  Just a footnote, Bambi did warn them a few weeks ago. In a way it was funny. Those who are burning Americans by pumping up oil prices got burnt.    

Fri, 06/24/2011 - 23:45 | Link to Comment caconhma
caconhma's picture

"Even though Bernanke can’t print more oil it is clear that we are entering into a new phase of a centrally planned economy. To us this smacks of price controls."

But Bernanke does not control the world oil demand and supply. Any central planning system inevitably creates severe shortages and black markets.

The best & easiest oil solution for Bernanke was to ask our Middle Eastern "friends" to pump more oil. But, it appears, they cannot do it. It obvious that for now we reached a peak oil production. Chinese, Indians, Vietnamese, etc., demands keep growing. Their people are not about to get out off their cars and start riding their bicycles again.

Oil shortages are just a beginning generating food shortages. Now, we are talking about hunger in the USA. Shit, it becomes an explosive issue. We are not talking any more about civil unrest. We are talking about a revolution with a real slaughter of the ruling elite.

 

PS

The Soviet collapse did not result in a revolt since the Soviet totalitarian system have the first class security/oppression apparatus and people were totally demoralized and did not have guns. In the USA, it is a totally different situation.

I do not think Bernanke and his masters are that stupid! Remember Obama is not either Stalin or Hitler or Franco or Pinochet or even Saddam Hussein.

Sat, 06/25/2011 - 09:24 | Link to Comment Idiot Savant
Idiot Savant's picture

The Soviet collapse did not result in a revolt since the Soviet totalitarian system have the first class security/oppression apparatus and people were totally demoralized and did not have guns. In the USA, it is a totally different situation.

There are many differences in a Soviet v. United States collapse. Here's a piece by Dmitry Orlov, which outlines some major differences. A good read IMO.

"Closing the 'Collapse Gap': the USSR was better prepared for collapse than the US"

 

http://www.energybulletin.net/node/23259

 

 

 

Sat, 06/25/2011 - 11:12 | Link to Comment caconhma
caconhma's picture

It is a very good piece. Thank you.

In USSR, during its 70-years survival, people went through

- 2 revolutions

- multiple civil wars

- the NAZI invasion

Consequently, Soviet people used to survive. People did not rely on their government for survival since it was never offered. The Soviet state was designed to be a self-sustained. It did not need to import any thing.

Finally, during the Soviet collapse, the rest of the world was stable and in a good economic condition. So, Russians were able to use their export to recover. At the same time, America cannot survive without importing the basic commodities. USSR was a totalitarian state with its survival as the primary objective.

Fri, 06/24/2011 - 21:12 | Link to Comment knukles
knukles's picture

Lemme see.  How much gold is really there if it's all 400+oz Wolframs (slaties) plated to say, a 1/64th of an inch?   

Sat, 06/25/2011 - 00:40 | Link to Comment bigelkhorn
bigelkhorn's picture

Great stuff as usual. 

 

I think it is interesting what has happened in the last week, Greece problems, Bernanke admiting US is crappy, and oil problems too. A crazy week, I am guessing there is a bigger move coming on the market. Been following this guy for a while, his trading advice is killer and is very accurate.... latest video - http://www.youtube.com/watch?v=xKP90DrpfzQ

Fri, 06/24/2011 - 18:14 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

For, what, a couple of years I have been preaching that gold was a BARGAIN at under $1500.  Since we breached that level (for now?), I still feel that everyone should own gold.

Gold is the best diversification you can get (if you have none or very little now) and is also the best wealth preserver in town.

I practice what I preach.  If it goes down, it matters little for me.  I just buy as I have money come in.

Sat, 06/25/2011 - 11:09 | Link to Comment Harlequin001
Harlequin001's picture

The opening intro hints at the real problem, it will be taxed to death...

And so hopefully will end paper gold trading in the US.

One more step towards a third world economy reliant more and more on illegal gold trading to retain any semblance of real value...

Sat, 06/25/2011 - 15:47 | Link to Comment trav7777
trav7777's picture

gold is relatively portable if you know what I mean

Fri, 06/24/2011 - 18:22 | Link to Comment billwilson
billwilson's picture

Futures expiration on Monday ... Gee, dya think that may be part of the reason for the sell-off? Usually is. Nice initial bounce on Tuesday, then one more sharp sell-off on Wednesday (or later Tuesday), then a bottom is in. The miners not following to new lows today is the "tell".

Fri, 06/24/2011 - 21:19 | Link to Comment knukles
knukles's picture

Back to "defending" $1500 again?  Now, who was that masked person about 3 or so weeks ago began selling a boatload of what was it, 1450's?
Don't say it ain't so, Joe, that they're at it again..... 

And BTW, anybody else (of course as its been heretofore discussed, so not to forget it at this "critical" moment) remember that the physical volume of COMEX good delivery silver has been plummeting as folks have been pulling the shit out of warehouses like there's no tomorrow?

Arragh, thar be elephants trampling hereabouts, methinks.

Fri, 06/24/2011 - 18:30 | Link to Comment Threeggg
Threeggg's picture

It's all about "The Paper"

.

Fri, 06/24/2011 - 21:22 | Link to Comment GoinFawr
GoinFawr's picture

I know you. And you know when.

Fri, 06/24/2011 - 18:27 | Link to Comment Stuck on Zero
Stuck on Zero's picture

My observation, over a lifetime of observing management in companies, is that as a manager fails, because of poor policy decisions, the manager will ask for more power and control and will tighten down what they have.  If you give that manager more control and things get worse he/she will ask for more control.  What usually happens is that the backlash comes and everything gets worse and disaffection grows rampant in the ranks.  Isn't this repeated at the government level with every failed program the government attempts?

Fri, 06/24/2011 - 18:41 | Link to Comment Isotope
Isotope's picture

Yeah, I read this somewhere a while back with respect to police and this sort of thing. Their usual attitude is, "This law isn't working, we need more of it." Kind of a variation on, "I've cut this board two times and it still isn't long enough."

Fri, 06/24/2011 - 21:29 | Link to Comment GoinFawr
GoinFawr's picture

nice.

Sat, 06/25/2011 - 04:18 | Link to Comment Yen Cross
Yen Cross's picture

Read +1 Nice work, Gentlemen!

 

       I have an EVIL TWIN that speaks languages, you could  only imagine!!!!

Fri, 06/24/2011 - 18:29 | Link to Comment Isotope
Isotope's picture

It almost looks to me like the early signs of the government beginning to flail around. It's a giant, it is wounded, and losing control of itself and its surroundings. It makes increasinly violent and unpredictible decisions and moves, not caring about the real consequences, further injuring itself in a death spiral.

This is probably a uselessly vague thing to point out in the sense of any specific analysis. But it is important to remember to stay as far away from the beast as you can, because even in its injured state it can still hurt you badly if you try to interfere.

Fri, 06/24/2011 - 21:47 | Link to Comment Misstrial
Misstrial's picture

+1000

I've been thinking of it as a drunk who first meanders, then weaves back and forth, then stumbles, gets up staggers to and fro a bit before falling down again. The drunkard's path of travel is unpredictable.

Try to help and risk getting physically attacked.

~Misstrial

Sat, 06/25/2011 - 00:53 | Link to Comment Prometheus418
Prometheus418's picture

People (as a group, that is) suck.

I remember very clearly feeling something like this shortly after Sept. 11th, 2001.  The image I had then was of a schoolyard bully having had his pants pulled down when he was looking the other direction, and then lashing out at all the other children in the schoolyard.

Now it's a full-grown drunk.

Charming.

Fri, 06/24/2011 - 18:31 | Link to Comment Jasper M
Jasper M's picture

Translation: "Market forces are about to reassert, and take the price of oil back down to where it's been doomed to go for a long time. We disapprove, so here's a conspiracy theory."

Fri, 06/24/2011 - 18:42 | Link to Comment 1Fatboy
1Fatboy's picture

Somehow I doubt that you are correct:

 

http://research.stlouisfed.org/fred2/series/BASE

 

 

Fri, 06/24/2011 - 18:35 | Link to Comment False Capital
False Capital's picture

Tin Foil Hat Alert: All gold will trade through exchanges and while we don’t think ownership will be prohibited it may be taxed to death.

 

In that case I will hold it till death. These bitches will get nothing from me.

 

 

Fri, 06/24/2011 - 18:42 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+ $1500.

Tinfoil Hat Brigade member Bearing complete agrees.  Gold can sit still for GENERATIONS, just sitting there protecting wealth.

And it can be quietly given away.

Fri, 06/24/2011 - 18:40 | Link to Comment Isotope
Isotope's picture

Black market, it's what's for breakfast. And lunch. And dinner.

(BTW, isn't that supposed to be Bitchez?)

Fri, 06/24/2011 - 19:24 | Link to Comment Hacked Economy
Hacked Economy's picture

"Bitches" = derogatory term, intended to belittle and demean.  Commonly used by teenagers and blog trolls.

"Bitchez" = brotherly term of endearment.  Commonly used on ZH to form bonds with fellow Fight Club members.

Fri, 06/24/2011 - 19:53 | Link to Comment tpberg7
tpberg7's picture

Semantics Bitchez!

Fri, 06/24/2011 - 21:51 | Link to Comment GoinFawr
GoinFawr's picture

the single junk was a cherry on top.

Sat, 06/25/2011 - 08:44 | Link to Comment GetZeeGold
GetZeeGold's picture

 

How are they going to tax my gold in the sock drawer?

 

 

Sat, 06/25/2011 - 10:08 | Link to Comment William113
William113's picture

They hired 16,500 IRS agents and bought 1200 Remmington 870 pump shotguns when they passed the health care bill. Thats how

Sat, 06/25/2011 - 14:48 | Link to Comment kumquatsunite
kumquatsunite's picture

None of whom have English as their first language; in other words, the foreigners who hate you are coming for you! Oboma's plan has always been to create a "final solution" of immigrats controlling the government and forcing you to your knees. Nobody hates us as much as those we let in under the guise of "compassion". They are then stuffed into government jobs where, just as in Dr. Zhivago, the lower classes punish those who have been successful and productive. Time to run and hide, my fellow kumquats, time to run and hide. Oh, don't forget your daily dose of Judge Judy! Any time I'm feeling "compassionate" I replay a segment from her show and watch how the gutter trash behave...

Sat, 06/25/2011 - 10:23 | Link to Comment Ace Ventura
Ace Ventura's picture

They can't. Provided you keep that 'barbaric relic' in the sock drawer like a good little citizen and not actually try to sell it for whatever form of functioning currency exists at the time (dollar, new dollar, amero, bancor, etc).

Not sayin' you would do so, of course. Just sayin'.....if you know what I'm sayin'.  :-)

 

Fri, 06/24/2011 - 22:06 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

So sad! If you still play in a casino and expect to win, you are a sucker. 

Keep betting your paper AU, and end up giving all your stuffed bears back to the oli-carnies.

 

Fri, 06/24/2011 - 18:40 | Link to Comment PaperBear
PaperBear's picture

"speculators liquidating calls".

What fools, just take the physical metal and be done with paper gold.

Fri, 06/24/2011 - 18:37 | Link to Comment equity_momo
equity_momo's picture

Let assume the govnernment put a tax on all physical gold transactions of say 20% (in the UK Silver is taxed at VAT of 20% for example)   What will the unintended or intended consequences be? Im sure it wont be what the govn desire , ie  , a lower gold price. Thoughts?

Fri, 06/24/2011 - 18:49 | Link to Comment DosZap
DosZap's picture

They already do.

Under a $1000.00 purchase, cost's you 8.25% in Texas.

When you sell, you pay 10% for short term profits (12mos sale or less), and 28% for over 12 mos(long term), and add the profits to your regular income, and it get's taxed yet again.

If a VAT hits it, then I will just move offshore...........bout had enough of this clusterfk now.

When will we get  tired of assholes taking from us what belongs to us, by malevolent means?,that we act.

Fri, 06/24/2011 - 19:03 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Send me a gmail DZ if you would like the link to my blog, we share some interests (gold, offshore).  I run it under my real name so do not post the link here.

Sat, 06/25/2011 - 07:41 | Link to Comment JJSF
JJSF's picture

How can i find your blog?

Sat, 06/25/2011 - 15:55 | Link to Comment DosZap
DosZap's picture

DoChen,

gmail sent hours ago.

Hit me.

Fri, 06/24/2011 - 19:08 | Link to Comment Dr Zaius
Dr Zaius's picture

The thing about gold is that in small enough quantities (a few ounces to perhaps a few pounds) it is virtually untraceable. It can be loaned, sold, bought, carried and stored outside the prying eyes of the government. That seems to be a big reason why gold is a menace to TPTB and their desire to control everything.

Fri, 06/24/2011 - 19:21 | Link to Comment equity_momo
equity_momo's picture

In the UK there is zero tax on physical gold and if you stick to the UK denominated coins , sovs and brits , theres no capital gains either as it is still considered tender (although noone wants to use it as such as its all stamped with 50 pound value)

If govns start to impose VATs and more draconian taxes to physical metals i can see how one would go offshore. There is simply little other safe store of weath that i feel confident comes out the other side of this cluserfuck.  And it would drive a thriving black market no doubt.  

New taxes on physical metals would seem an obvious step for the knuckleheads in charge though.

Sat, 06/25/2011 - 15:58 | Link to Comment DosZap
DosZap's picture

equity,

Like I said, if they start the seizure,VAT crap, I personally will expat, and take my stuff w/me.

Hell of a lot more ways to get off this continent than Air.

Sat, 06/25/2011 - 13:13 | Link to Comment Jonas Parker
Jonas Parker's picture

and that's why I buy my gold in Oklahoma...

Fri, 06/24/2011 - 18:59 | Link to Comment Dr Zaius
Dr Zaius's picture

Well, I would imagine that much of the trading be moved underground and gold smuggling over US borders would become common. I imagine much of the physical gold market happens for individuals in units of a few ounces at a time. It would be virtually impossible to stop at that level. Mexico and Canada could grow a healthy business of providing a safe haven market and storage of gold owned by Americans.

Fri, 06/24/2011 - 19:57 | Link to Comment lincolnsteffens
lincolnsteffens's picture

Whoops, sorry about that I didn't mean to junk you. I wanted to add to your thread.

I spoke with a customs officer in Boston about moving gold into and out of the US since you have to report $10,000 crossing the border. He said US gold coins and other "bullion" are treated as commodities and not money. There is no prohibition or reporting to move commodities out of the US. I've sent a small amout of money overseas and am planning to bring at least two money belts with gold this winter. Sooner if they try to restrict it. Who the hell can possibly believe we are a nation of free people. We are only free to do what isn't allowed by ever increasing laws and regulations. The US is still a great place for me to live since I'm doing well. I pity the poor underdog that doesn't understand what is happening.

Fri, 06/24/2011 - 20:58 | Link to Comment BayAreaAlan
BayAreaAlan's picture

I do not believe your Boston customs officer is accurate.

http://piratestreasuresite.com/Home/tabid/64/articleType/ArticleView/art...

However, force and thuggery beat out law and logic these days.

Sat, 06/25/2011 - 00:09 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

He is correct.  I have taken gold out of the country twice.  Once was for over $10,000 worth.  I have told this tale before of the B-Team Customs Agent who tried to trick re proper valuation.  I knew the law before she did!

Take all you want out, but DECLARE IT if over $10,000 (market value, NOT Legal Tender value).

If you travel often to the same place, just take less than $10,000 per trip...

Sat, 06/25/2011 - 07:50 | Link to Comment mr_T
mr_T's picture

Gold could be taxed to death.. that's what I have been thinking for a long time. As they said in Casino, " In the end the house always wins"

I moved all my gold out of US .. BUFFALOS are valued at $50 usd by customs .. so you can take a lot.. the next QE should come along shortly before elections... A happy voter is a good voter.. when you vote with ur 401k... The only change is no change..

Now go have a Coke and a smile.. NO make that a pepsi since it looks less communist..e

Fri, 06/24/2011 - 20:57 | Link to Comment legal eagle
legal eagle's picture

If you are doing well, leave your gold outside the United States, and break no laws. Why take unecessary risks? I keep 90 percent of my PMs offshore. It is my emergency fund

Sat, 06/25/2011 - 10:35 | Link to Comment Ace Ventura
Ace Ventura's picture

Forgive the rookie questions, but considering how many posters here are doing this.....how exactly is it safe to move physical metal out of the country, and still retain guaranteed access to it? Are you talking about pre-stocking a PM stash abroad in case TSHTF here, and accessing it directly by actually leaving the U.S. and moving to that location?

Maybe I'm too old-skrewel, but phyiscally parting with metal in my possession and trusting that it will remain safe and accessible in another country....seems 'optimistic' at best? Once the U.S. collapses for real, won't the majority of other westernized nations already be in full-blown collapse, or following shortly thereafter?

 

 

Sat, 06/25/2011 - 14:16 | Link to Comment spinone
spinone's picture

in the basement of a bank in Guernsey

Sat, 06/25/2011 - 16:09 | Link to Comment DosZap
DosZap's picture

Anyone would be a blithering idiot to allow storage of their PM's by ANY facility other than themselves.

I have not found ONE depository, (except Perth), that I would come close to trusting.

And that's at about a 10% trust value.

I IMplore you people who are off shoring/on shoring with these SO called safe Storage vault places, etc, read the fine print..........there are SO many ways you LOSE if anything big hits.Or, a simple change in laws.

Think they are going to take it in the crackster for YOU?.

Dream on.

Fri, 06/24/2011 - 18:40 | Link to Comment TheGoodDoctor
TheGoodDoctor's picture

So, wouldn't the trade algos just be following the price of oil and then bring down the price of gold. Aren't they attached via the algo?

Fri, 06/24/2011 - 18:49 | Link to Comment Ray1968
Ray1968's picture

They can tax the shit out of gold sold on the open market. But when things break down, your gold will be bartered as a means of survival. Bartering, to the dismay of our overlords, is not trackable. Lesson: if it is not in your hand, you don't own it.

Fri, 06/24/2011 - 18:55 | Link to Comment TheGoodDoctor
TheGoodDoctor's picture

It is taxable however. But yeah I'm with you.

Fri, 06/24/2011 - 19:34 | Link to Comment Hacked Economy
Hacked Economy's picture

I met a private seller in a public parking lot after sundown a few weeks ago and bought a few hundred dollars' worth of SAEs and Maples from him.  No tax involved, unless he chooses to actually declare it to Uncle Sam.

Sat, 06/25/2011 - 10:45 | Link to Comment Ace Ventura
Ace Ventura's picture

Wish I had access to such sellers. Virginia loooooooves creative taxes. All coin/bullion sales are taxed here. Still, I do have access to one little hole-in-the-wall vendor who keeps premiums competitive enough that the added taxes don't hurt his competitiveness against the online vendors. Plus, no minimum purchase, which for dudes-of-modest-means like myself is the only option possible.

 

Sat, 06/25/2011 - 16:19 | Link to Comment DosZap
DosZap's picture

It should be against the law to TAX money.

If it is legal tender.

Most Texas vendors will let you slide on the 8.25%,under a $1k.

Some won't.Others will not even sell you unless it's $3k-5k worth.

Sat, 06/25/2011 - 10:26 | Link to Comment theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

When the dollar fails the government will have no money...where will the power come from to tax gold? or enforce it?

Sat, 06/25/2011 - 14:21 | Link to Comment spinone
spinone's picture

Through the distribution of EBT ration cards.

Fri, 06/24/2011 - 18:51 | Link to Comment FranSix
FranSix's picture

I think that Dodd-Frank is actually doing the commodities a fair bit of good, by preventing the commoditization of prices, and causing a major cleanout. As for gold, this will inevitably realize it's value component.

At the same time, this negatively impacts erroneous hyperinflationary expectations.

Sat, 06/25/2011 - 02:44 | Link to Comment akak
akak's picture

You're funny.

Fri, 06/24/2011 - 18:51 | Link to Comment PulauHantu29
PulauHantu29's picture

Too bad the gubberment cannot control several billion Indians and Chinese demanding...hoarding physical silver and gold.

As The World dumps treasuries, The Bernank is getting nervous as our economy sinks into The Long Depression.

The Fed is trying to force investors into treasuries imho. It's called, "financial repression" I read.

GL!

Fri, 06/24/2011 - 19:12 | Link to Comment DosZap
DosZap's picture

The Fed is trying to force investors into treasuries imho. It's called, "financial repression" I read.

 

And,before it's over you will wake up one day,fire up the Net, go to your bank, click on the news, or see in the newspaper, your entire life savings have been basically "seized", and you will get it doled out to you, as YOU can prove HOW much is the minimum you must have to survive on.No more, No less....................and be required top PROVE it.

Anyone here think the Feds pension plan will ever be refunded??

Not on your life.............

Postal employees are getting it now,no more input(except THEIR voluntary amounts),as if that will not pissadear also.

Note to USPS emp's.................stop your 401k/pension disbursements.

 

Fri, 06/24/2011 - 18:49 | Link to Comment alexdg
alexdg's picture

With all this intervention, thoughts of price controls and financial repression, I guess we are really going to have a lot of inflation. As tweeted by PIMCO :

PIMCO
IEA Action yesterday continues policymaker efforts to cap bad inflation (silver margins etc.) Nonetheless – higher inflation ahead.
6/24/11 5:09 PM
Fri, 06/24/2011 - 19:02 | Link to Comment Greeny
Greeny's picture

I think the intend is to take anything possible down and clear the space for future Bernank QE's, cannot do it, while GOLD sky high, Dollar all time low and Markets are still high.. Need to take everything down first to justify further screwflation action..

Otherwise GOLD in JAN 27 2011 was under 55 MA and Under 100 MA

Right now we just little below 55MA and about 40$ to go down to

100 MA, I don't see anything extraordinary here other than just Month end and Quarter end and perhaps option expirations

Fri, 06/24/2011 - 19:05 | Link to Comment Rynak
Rynak's picture

But the cash did not simply vanish, so this supposed "headroom" is all just illusion.

Fri, 06/24/2011 - 19:05 | Link to Comment Landrew
Landrew's picture

Sorry, I don't believe this had anything to do with price controls.

Spot crude prices have been falling for weeks. This was nothing more than

an asset sale! Dollars for extending the treasury past the Aug. 2 self

imposed debt ceiling deadline. Everything is for sale now. If this wasn't

purely an asset sale why would they ask $112 for an August sale?

If you are trying to lower crude prices you sell for less not more?

 

 

 

 

 

Fri, 06/24/2011 - 19:11 | Link to Comment Greeny
Greeny's picture

Unless you believe in deflation and I'm not buying that.. As For crude they said many times, Libya was accountable for at least $10-15 Premium, then few margin cuts on top of that.. Otherwise Brent Crude ended at $105/barrel is that really that low? We were there May 2 2011 and I didn't heard anyone crying about  OIL collapse..

Fri, 06/24/2011 - 19:12 | Link to Comment DosZap
DosZap's picture

Well Obammy has 30 Million barrels for sale..............beginning asking price $112.00/bbl.

Dig that, over Mkt!!.

You may of course, bid LESS.Or more..................

Fri, 06/24/2011 - 19:19 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Biflation is biting them in the ass. And biting business margins and consumer largess. And that's why despite 24/7 monetary stimulus they're only getting a crummy 1.9% Q1 GDP (! OMG!) 

They've reached the endpoint of limitless monetary expansion: biflation. And it's picking up steam big time. Remember the effects of both inflation and deflation get magnified many times over when both are hitting consumers and business simultaneously, like chasing more uppers with more downers (they don't cancel out). In Q2 they've seen a pickup in unemployment, accelerating declines in home prices, sagging real incomes and the start of cuts to retirement and healthcare benefits across the board. As a byproduct of zero interest rates savings are disintegrating at a faster clip. But at the same time raw materials and energy prices rose faster. And consumer staples are picking up steam. Prices paid by businesses are being passed along to consumers to relieve margin squeezes (they held off but can't any more). And this quarter for the first time inflation is showing up in their antiquated metrics of CPI and core CPI, also signaling a warning. 

I've predicted price controls as the only solution that they can come up with. I continue to predict it. The Fed is out of alternatives. They don;t want to admit that they need them. But they can only cool raw material costs for so long by selling off assets and the White House silver. 

Fri, 06/24/2011 - 21:44 | Link to Comment topcallingtroll
topcallingtroll's picture

I wish people would quit reinventing the wheel.

Stagflation is the correct term.

Fri, 06/24/2011 - 19:20 | Link to Comment mayhem_korner
mayhem_korner's picture

I'm buying every oz I can find.  Let them play with the paper price.  The smacks of a desperate attempt to ward off a run on physical.  Given the D-F timeline, I should think it wise for folks to buy and bury every Ag and Au they can before the deadline.

Ya can't tax what ya can't find!!!

Fri, 06/24/2011 - 19:23 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+ $1500 today

+ $55,000 next year?

Breaking news: my local coin shop has NO Gold Eagles (1 oz) in stock.

Fri, 06/24/2011 - 19:53 | Link to Comment mayhem_korner
mayhem_korner's picture

Lotsa scarcity these days...remember Apmex not so long ago???

Lot of dealers short gold and silver - trying to charge premiums for proofs and older models. 

Silver rounds are still a very good buy, as is the 90% and 40%.  Even some places running out of 90% Kennedys these days.

The physical demand is real, and it's being numbed by the oligarch's hopium.

We store.  We win.

Sat, 06/25/2011 - 01:02 | Link to Comment Prometheus418
Prometheus418's picture

As of yesterday, the local coin shop had about 30 90% silver dollars (mostly Morgans,) two silver eagle proofs, and no gold or other 90% that I could spot.

Silver dollars were going at a premium, first time for that in this shop, where they always checked spot price before.

 

Fri, 06/24/2011 - 20:03 | Link to Comment Praetorian Guard
Praetorian Guard's picture

What a crock of shit. 55K for gold. Do realize what the world and society in general will be like if gold hits that price? Mad Max, where PM's mean very little and its rule by the gun...

Fri, 06/24/2011 - 20:44 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Not necessarily:

fofoa.blogspot.com

Read and learn.

Fri, 06/24/2011 - 21:42 | Link to Comment tmosley
tmosley's picture

Eh?  Gold went from $35 to $800 in a decade.  No Mad Max then.  Why must we have it now?

Why do people continue to repeat this meme?  Mad Max was a FANTASY.  It has never once happened in the history of humanity.  This is just a mental trap to keep you docile.  The idea that without government control of money, society will just fall apart at the seams is absurd.

Sat, 06/25/2011 - 10:32 | Link to Comment theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

We've had the rule of the gun before, money still existed; those with the most oney bought the biggest guns

Sat, 06/25/2011 - 12:11 | Link to Comment dogbreath
dogbreath's picture

wrong.   he who hath the gold make the rules.  In history that didn't always mean the king because they were often in debt to the bankers.  All the gold ever produced and not lying on the bottom of an ocean has been "accumulated", stolen looted or otherwise.  there may be the mad max pirates around as physical is risky to hold as any 17th century gallion captain could tell.  pratorian guard? isn't that somthing like the gestapo or soviet intirior ministry.

Sat, 06/25/2011 - 00:50 | Link to Comment ezcearhoc
ezcearhoc's picture

Lots of dealers are "out of stock" of Gold or Silver Eagles when the spot price is down. Somehow the stock magically returns when the spot price goes up. It's funny how that works.

Perhaps your dealer is as sure as you and I that the price will go back up, so he'll wait until then to tell his customers he has them in stock.

Or maybe he doesn't care about making money.

Fri, 06/24/2011 - 19:33 | Link to Comment Hacked Economy
Hacked Economy's picture

SAEs, Maples, and pre-1965s for me, a little more every week.  I don't the big 5000+ oz stash that some others here claim to have, but it'll all add up over time...

Sat, 06/25/2011 - 01:01 | Link to Comment Prometheus418
Prometheus418's picture

Same here- it adds up pretty quick, actually.  What used to fit comfortably in one hand now needs a box, and is gaining real weight.

Sat, 06/25/2011 - 17:25 | Link to Comment Hacked Economy
Hacked Economy's picture

It's a good feeling, ain't it?  When I went from "in the hand" to "geez, I'd better get a storage tote for all this", I realized I was amassing wealth for real.  Now I'm working toward the next tote's worth.

I read a story about an eldery man who passed away, and his son discovered 55oz of silver rounds in the attic.  That got his son appreciating his father's tendency to plan ahead and set at least something aside in PM, even if only the small amount he could afford.

When I passed the 55oz mark in my own stash some time ago, I was happy.  If I ever get an unexpected inheritance, my dream is to buy a monster box.  "Stuff" won't make you happy, but a monster box in my...ahem...safe location that will remain unmentioned...would certainly bring a tear of happiness to my eye.

Fri, 06/24/2011 - 19:41 | Link to Comment Caviar Emptor
Caviar Emptor's picture

It's the antidote to the insanity of the Fed. There are now too many people in the world ready, willing and able to buy up the gold Americans don't want. If they try to confiscate gold, a whole boatload will be disappearing forever overseas. And they know it

Fri, 06/24/2011 - 19:46 | Link to Comment mayhem_korner
mayhem_korner's picture

I'm counting on a few select pre-1933s will get me & the honey a nice ride to Bora Bora...

Fri, 06/24/2011 - 19:38 | Link to Comment Buck Johnson
Buck Johnson's picture

They are going to legislate and tax to death the commodities to the point that they might as well confiscate it. 

Fri, 06/24/2011 - 19:42 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Trouble is, the commodities will just take the boat over to China, India, and everywhere else they've got surplus dollars to spend. They'd only be too happy to have their overhead costs decline. And at the same time, taxing and legislating down the economy would provoke another economic collapse. 

Fri, 06/24/2011 - 19:47 | Link to Comment Quinvarius
Quinvarius's picture

All these guys that pumped gold when it moved up 40 points are now doing the opposite since it was raided down 40 points.  When gold drops the day before OPEX, on news that should have sent it flying, it isn't a real move.  Stocks will continue to drop.  Gold and silver will continue to rise.  Our economy will collapse with our monetary system.

Fri, 06/24/2011 - 20:03 | Link to Comment Glasgow Gary
Glasgow Gary's picture

If gold is "taxed to death" in the US, which is simply another form of artifically lowering its price, it will simply trigger a flow of supply out of the US. Let me make this clear, there is nothing the US can do to control the price of gold for any length of time. Just as in the oil dump from western inventories, this simply creates a short-term bargain price for other buyers. This isn't the 1930's. The US is no longer the center of the universe. There's alot more of "them" in the world than "us" here in the US and frankly that's a good thing. We can no more control the price of gold now than we can control the price of oil. Bring on the taxation, bring on the exchange and price controls. It will not matter one bit.

GG

Sat, 06/25/2011 - 00:45 | Link to Comment sgorem
sgorem's picture

+1000

Sat, 06/25/2011 - 09:38 | Link to Comment 556nato
556nato's picture

A lot is two words.  Your words will carry more weight with proper grammar.

Fri, 06/24/2011 - 20:13 | Link to Comment Praetorian Guard
Praetorian Guard's picture

Yet gold is some arbitrary "wealth"/monetary chip holder that has to be agreed upon by the masses. If things get bad enough PM's won't mean diddly dick, as JiT will have shut down leaving massive gaps in supply - not to mention civil unrest that makes Greece look like a Sunday school play. People will trade tangible items, things they can use or trade back that have inherited value in the items work or continued existance. I could go on and on for quite some time as to why PM's won't work in a meltdown, but I won't. The ONLY reason PM's work in countries like Zimbabwe is because they can still get black market goods and items into the country from other sources. Yet what happens when these sources are in flames or having their own issues??? Hell just look at the crop yields - we are SOL. PM's are great, don't misconstrue my words, yet if things go south as they appear to be, I'll put my faith in Barrett any day over PM's...

Fri, 06/24/2011 - 20:38 | Link to Comment Quinvarius
Quinvarius's picture

So name one, just one, example of a meltdown where gold wasn't used as a currency.  Now name one melt down, just one, where everyone ran around in assless chaps and hockey masks and all trade completely stopped.

Trust the pattern.  Gold has always been used and will always be used.  Even after a nuclear war, people will sell you stuff for gold.  There will always be a place people can escape to where they can spend their gold.

Sat, 06/25/2011 - 10:19 | Link to Comment Bendromeda Strain
Bendromeda Strain's picture

Better late than never - thank you for the belly laugh...

Fri, 06/24/2011 - 21:41 | Link to Comment topcallingtroll
topcallingtroll's picture

They wont work that great in the early parts of the meltdown. That is when you grab more gold from desperate people.

If you have strong hands most assuredly your gold would be more valuable after the situation stabilizes a bit.

Fri, 06/24/2011 - 21:48 | Link to Comment lawrence1
lawrence1's picture

You are ignorant of history.  Put you faith anywhere you like and pray.

Fri, 06/24/2011 - 22:47 | Link to Comment RockyRacoon
RockyRacoon's picture

You imply that it is a choice between the Barrett and PMs.   It's not a choice, it's a complimentary situation.   I'll bet that every holder of PMs on ZH or any other place also has at least one delivery system for other types/shapes of metal.   Don't be so narrow-assed as to think that food, heirloom seeds, and other stored items aren't on the agenda.

Sat, 06/25/2011 - 00:11 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+++

We have an amateur here Rocky!

Fri, 06/24/2011 - 20:40 | Link to Comment Cruzan Stomp Revival
Cruzan Stomp Revival's picture

If a VAT hits it, then I will just move offshore...........bout had enough of this clusterfk now.

 

Amen, brother. I'm a 40 NM sail from the British Virgin Islands and about 110 to St Maarten. Tax gold and watch REAL wealth fly out of the country. Buy a $50k economic passport from Dominica, set up an offshore account using this document and extend the middle finger towards the States.

Ah, not that I've done that of course. Er, you guys won't tell on me if I have, right? Right?

Fri, 06/24/2011 - 21:32 | Link to Comment topcallingtroll
topcallingtroll's picture

.

Fri, 06/24/2011 - 21:32 | Link to Comment topcallingtroll
topcallingtroll's picture

Just take me sailing someday.

Help me lift my bag. Dont ask questions why it is so heavy.

Sat, 06/25/2011 - 00:10 | Link to Comment HungrySeagull
HungrySeagull's picture

Also put me to work on the Mast so I can break the rust off and relearn ocean all over again. I have been away far too long.

Sat, 06/25/2011 - 00:11 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Will this boat go on to Peru by any chance?

Sat, 06/25/2011 - 08:07 | Link to Comment Fred C Dobbs
Fred C Dobbs's picture

From what I have read here and elsewhere a second passport from Dominica will cost you about $110,000 usd.  There was a thread here a few months back on that.  Do you have new info that says otherwise?  

Fri, 06/24/2011 - 20:37 | Link to Comment janchup
janchup's picture

At some point you will here the phrase windfall profits followed by a huge tax. 

Fri, 06/24/2011 - 21:44 | Link to Comment topcallingtroll
topcallingtroll's picture

Guys did u see this?

Make private trading difficult.
Tax the hell out of it.
This has to be the ultimate aim.

Fri, 06/24/2011 - 20:42 | Link to Comment Atomizer
Atomizer's picture

Absolutely nothing, unless you trade paper commodities.

Money as Debt II Promises Unleashed (4 of 8)

http://www.youtube.com/watch?v=0-O_yGEI_0U&feature=watch_response_rev

 

Fri, 06/24/2011 - 20:47 | Link to Comment Kina
Kina's picture

They are just sending a massive buy signal.

 

They want to control bullion because they are scared it will sky rocket, bcome too popular.

 

OK then, everybody better by bullion you have been given the message by TPTB.

Fri, 06/24/2011 - 21:28 | Link to Comment topcallingtroll
topcallingtroll's picture

We will just create gold and silvers shows...just like gun shows.....where private citizens can make private individual transactions....if i have to fill out a 1099 on someone and they gave me a false name and address and my 1099 sent to them is returned in the mail.....oh well..

Fri, 06/24/2011 - 23:15 | Link to Comment RockyRacoon
RockyRacoon's picture

We are not citizens any more, we are consumers.  You're just not acting right.

My last gun show had a great food court!   It also had 2 dealers in gold/silver.  They were buying and selling.   

A great outing!

The gold price’s rhyming history
It is said that history does not repeat itself, but that it does rhyme. Whether this is true or not is a matter of interpretation in most cases. But ...

Click here to read more: http://www.goldmoney.com/gold-research/the-gold-prices-rhyming-history.html

Fri, 06/24/2011 - 21:49 | Link to Comment Goldtoothchimp09
Goldtoothchimp09's picture

sharing this with my ZH brethren -- stock market is ready to implode!  Based on my Elliott Wave setup.

 

http://jeffreygtc.blogspot.com/2011/06/friday-june-24th.html

Fri, 06/24/2011 - 22:56 | Link to Comment RockyRacoon
RockyRacoon's picture

Thank you for sharing.

Fri, 06/24/2011 - 22:25 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

If they tax or confiscate it everyone will just bury or be trading black market style. It's what mankind has done to survive while under tyranny since forever. Nothing has changed in 5000 years. Do you think having a lot of irredeemable dollars in a coupon/rationing style system will get you anything? At least with gold/silver you can wait things out and if you can't your kids or grand kids can. You or your family will get 100% of it's value. Think you can say this about American bonds or currency? They have to work overtime everyday to come up with new scams and wars to keep this system viable and that's how it's survived for so long. They will run out of tricks soon enough. No one knows what the value of a Federal Reserve note is today. That's they way they want it. They don't want anyone except connected people and insiders to be able to protect themselves or profit from their destructive policies. I can't tell you with any certainty what a Fed Dollar will be worth tomorrow but I can tell you  what it will be worth 50 years from now...NOTHING!!! and I can tell you this: As soon as the US Dollar has been exhausted and is not convenient for them to use as a means for profit and power they will drop it like a hot potato and not think twice about it. They will be out safely and you will be sleeping under a bridge and they won't think twice about you or your family. They'll probably even laugh at you for being so stupid and they'll be right to because if you buy into this system you might as well beleive in Santa Claus too because intellectually you are on the level of a small child. If you disagree please give an explaination or cite anything in world history that would prove a contrary outcome to our current situation. I'd love to hear...and please understand that no one gives a shit about anyone accept their family and friends and perhaps some countrymen but don't depend on them. The people who make our rules have no problems dropping bombs on strangers or torturing, or other things that would make most people very squeamish. They are the ones making policy. You are nothing to them. 

Fri, 06/24/2011 - 22:59 | Link to Comment RockyRacoon
RockyRacoon's picture

You show me your "...cite anything in world history..." and I'll show you mine!

Don't spout opinion and then require anyone who disagrees to provide "proof".

I agree with you -- but don't be pedantic.

Sat, 06/25/2011 - 00:33 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

I was born pedantic. Anyways picture yourself locked out of your bank during the Great Depression, or your savings devalued during a currency crisis 1 to 100 overnight, or your country bombed for it's oil, or drafted to fight in a war of colonialism for wealthy masters and told it's patriotic and for defense of the homeland,  or your safe deposit box searched and pilfered. These things and many others are the norm for mankind yet get forgotten in one generation and are never taught or explained to the people because the perpetrators are the ones making our rules and want us unaware of all the different scams and rackets that can be run on us. It's impractical to try to protect ones self from every scam but a little gold certainly can't hurt. I prefer to review con games and propaganda run over a time period of centuries not decades. Helps to keep things in perspective. 

Sat, 06/25/2011 - 00:50 | Link to Comment RockyRacoon
RockyRacoon's picture

Your scenario netted us the FDIC.   A major move into the meddling by government.

Moral Hazard in its infancy, so to speak.   Fools should not be protected from themselves.

I was furious that TPTB required ground-fault circuitry to be installed on any exterior electrical receptacle, regardless of when the house was built.  This required a new 12-2 w/grnd for the old homes which had 2-wire circuits.    I say if any dumb-shit ran his electric weed eater in a thunderstorm he ought to get his narrow ass fried.  If Joe weekend carpenter ran his ratty drill with bare insulation he should have his nads scorched.  So there.

Oh yeah, one more thing.  The elimination of dodge ball in the school gyms really takes the cake.   What's wrong with making fun of the fat kids and slamming them with a fastball to the jewels?   Might not be so many fat kids now if, 1. We had some exercise programs, and 2. They felt ashamed of their Twinkie butts.

Sat, 06/25/2011 - 01:30 | Link to Comment agrotera
agrotera's picture

thankx for the good laugh RR!!!

Sat, 06/25/2011 - 04:25 | Link to Comment Yen Cross
Yen Cross's picture

 Rocky? Take a chill pill!

Sat, 06/25/2011 - 10:13 | Link to Comment ibjamming
ibjamming's picture

Too many taking chill pills already...it's time for people to speak their minds...you don't know how many forums I've been banned from for speaking my mind.  If something is wrong and it pisses you off...tell people!  Spread TRUTH no matter how bitter it is.

Sat, 06/25/2011 - 06:10 | Link to Comment Jendrzejczyk
Jendrzejczyk's picture

Actually Rock, GFCI receptacles do not need a ground to operate and are perfectly legal to install on 2 wire systems.

Sat, 06/25/2011 - 11:26 | Link to Comment RockyRacoon
RockyRacoon's picture

Yeah, you have to jumper the green to white wires within the work box, outside the circuitry of the GFCI itself.   It won't test properly with a real tester and subsequently not pass the home inspectors report.   You're right back where you started.   I have years of experience with this thing as I owned a remodeling company during the 1990s and our major clients were the real estate agents.   They faxed us the inspector's repair list and the sales addendum and we made the requested repairs.   It was a lucrative business but not fun waiting to be paid until the house closed since we were paid out of escrow.   The other problem is that we actually worked for both the buyer and seller.   Not an ideal situation since the seller wanted repairs done on a shoe-string and the buyer wanted the Taj Mahal when we were done.

Sat, 06/25/2011 - 13:19 | Link to Comment Jendrzejczyk
Jendrzejczyk's picture

Not to get into a pissing match, but check out 2005 NEC 406.3 (D) (3) (b) + (c). Master electrician here with 30 years with the tools on (terrible business man).  Home inspectors need to be educated occasionally don't they?

Sat, 06/25/2011 - 22:33 | Link to Comment RockyRacoon
RockyRacoon's picture

They supposedly are educated, and have to be licensed in most states.  Any guy handy with a screwdriver can pass the test.   And I'll tell ya, jumping the ground to common won't make 'em happy.  That's what their book learnin' told 'em.

Sat, 06/25/2011 - 08:40 | Link to Comment Smiddywesson
Smiddywesson's picture

I tend to agree, but I cannot agree that those in power will just give up and hand over the reigns which tie us.  They will obfuscate, change the subject, look for someone else to blame, or claim some kind of victory and then write themselves into history as the heroes.  

Come to think of it, they will do all of the above.

Also, get ready for anyone questioning their behavior being branded as unpatriotic, and in later stages, as the civil unrest unfolds, as a terrorist.  Once they hang the t word around your neck, they can do whatever they want with you.  Welcome to the future.  If you hold gold you will be regarded as a terrorist and your grandmother will be urged to turn you in for the sake of liberty.

Terrorism Bitchez!

Fri, 06/24/2011 - 22:26 | Link to Comment steveo
steveo's picture

We posted this Ellipse of Doom months back, and thought the "Egg" dead when that overthrow occurred, now it is back in play.    For a number of reasons, thinking to go long ES next Sunday/Monday.

Keep in mind, the banksters don't want anyone else to profit in this nearly zero sum game.   That is why the big moves come at night and on weekends.

As per prior theory, rally into July 4th weekend, and then Kansas Go Bye-Bye (KGB)

http://oahutrading.blogspot.com/2011/06/fibonacci-time-relation-to-fear-factor.html

http://oahutrading.blogspot.com/2011/06/zoom-on-egg-of-doom.html

Fri, 06/24/2011 - 22:43 | Link to Comment chinaboy
chinaboy's picture

Either it is your logic weak or your reader's brain are weak.

(1) How can they tax ownership of physical gold (and how can it  be to death)?

(2) How can they sell put if they don't have them or money equivalent to that amount? Gold enjoys worldwide favor. The U.S. is not the biggest producer nor biggest consumer. Physcal gold stockpile is building up all over the world. Do they prepare to release gold reserve or print whatever amount of dollar required?

(3) Gold and silver is traded in all fashions (exchanges + OTC + ...) throughout the globe, how can they control the price for a long period of time?

 

I think this is a serious topic. One that many people try to understand. I have built a lot of respect for  FMX connect postings through zerohedge. Your analysis is a disappointment this time.

However, I do sense your dislike of government control price. I also share your nervousness when authority is playing with dangerous risk.

 

I don't want to fight with authority nor anybody. However, as far as gold is concerned, I am going to buy when the price is right.

Sat, 06/25/2011 - 04:28 | Link to Comment Yen Cross
Yen Cross's picture

  I'll open honest Dialog with China      [any day]

Sat, 06/25/2011 - 15:33 | Link to Comment fmxconnect
fmxconnect's picture

Sorry you feel that way. But when our gov't works with the IEA to keep /oil prices down, don't get in the way. it will certainly end in disaster, but not i na week or even a month. finally don't take our word for it, take Peter Beutel's, who essentially says look out below, despite his own contempt for blatant manipulation.

 

Regarding Gold:

Step1- inhibit off exchange transactions in metals

Step2- add a VAT or some other tax to keep a lid on the price

Step 3- buy when everyone is selling (affects China as well)

Step 4- "give in" to the IMF concept of SDRs being a new world currency, provided Gold is a piece of the basket. 

 

Revalue Gold as part of our own currency backing. Trumps China and the Brics economically.

 

If you don't believe that is possible read some of James Rickards' stuff.

Finally, you don't believe that JP Morgan is actually short silver do you

VBL

 

 

Sat, 06/25/2011 - 15:37 | Link to Comment fmxconnect
fmxconnect's picture

dupe

Fri, 06/24/2011 - 22:56 | Link to Comment Stuart
Stuart's picture

The US does not control the gold market anymore.  If they try to regulate to tax to death, all gold trading will move offshore at the speed of light.  It would be like the US trying to control the market for oil.   Give me a break. 

 

Sat, 06/25/2011 - 15:56 | Link to Comment fmxconnect
fmxconnect's picture

The U.S., western Europe, and  the Saudi's are right now before our eyes trying to keep a lid on oil prices. They will succeed. To understand why, one must understand how the Saudis operate, and the dynamic between the U.S, them, and the OPEC rebels (iran, venezeula etc). The last time other opec members defied the Saudis, oil was driven down to $11.00. They will crush the other members simply because thy CAN pump more, where as those that do not want to pump more cannot efficiently scale up anyway.

 

This is an attack on Iran and the others, that simultaneously benefits us and Obama's re-election chances. But it should work. We'll pay later though.

 

Regarding Gold, you are right. Obliteration of the OTC market will drive Gold out of the country by those with the means and brains to do it. The rest are stuck. Selling jewelry, that will get you a 1099. Buying coins, 1099. Trading on an exchange, audit trail.

Two years ago we were alerted to this possibility by a hedge fund manager who purchased large quantities of  Maple Leafs and left them in Canada. Others have opened allocated accounts at the Perth mint.

None when asked said it was a tax dodge (for what that is worth). But all recognize the need for a hedge against confiscation and the walls being built around theU.S keeping domestic money in, and chasing foreign capital away with its abuse of the rule of law (Chrysler Bonds).  So while some doubt it, others are preparing for it. 

 

VBL

Sat, 06/25/2011 - 17:34 | Link to Comment spinone
spinone's picture

Saudis no longer have the excess capacity to keep a lid on prices, hence the SPR trump card:

http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overst...

Sat, 06/25/2011 - 00:10 | Link to Comment HungrySeagull
HungrySeagull's picture

I believe that the Gold will dip and then rise. Silver is probably gonna bleed down a little. Maybe 30. Anything less than that I am buying more.

I must be in the minority as the majority think falling prices = losses and don't seem to understand that lower prices = buying and holding with strong hands.

I won't even consider going back to the late 80's with the pricing, if that happens... well I will buy. Call me a dumb bull, I think I will be a happy bull someday, or the children will.

 

The two things still bother me. July 15th and August 2nd.

Sat, 06/25/2011 - 08:17 | Link to Comment Fred C Dobbs
Fred C Dobbs's picture

I agree.  Well said dumb bull.  

Sat, 06/25/2011 - 00:41 | Link to Comment tradewithdave
tradewithdave's picture

Thankfully you can still buy a vowel on the Wheel of Fortune. 

http://tradewithdave.com/?p=7091

Dave Harrison

www.tradewithdave.com 

Sat, 06/25/2011 - 04:25 | Link to Comment Yen Cross
Yen Cross's picture

  THE {real bad guy} Is your best friend!

Sat, 06/25/2011 - 04:25 | Link to Comment Sizzurp
Sizzurp's picture

Sooner or later TPTB are going to run out of cute gimicks to keep the USD looking healthy.  All they are doing is buying a little more time for those in the know to prepare accordingly.  The current monetary system is a fraud and a shame. The SPR is supposed to be an emergency energy supply to be tapped only under the most dire of circumstances.  I guess when el prez is getting trounced in all the poles, we have such an emergency.  The system is springing leaks all over, and these jokers are trying to patch the holes with chewing gum. It might work if land was in sight, but we are in the middle of the ocean and there is a hurricane coming. Quick let's raise margins at the Comex, oh crap get into to Libya, damn release the SPR. Next it will be release the Kraken. These are acts of fear and desperation. Time to embrace the horror.

Sat, 06/25/2011 - 04:40 | Link to Comment Yen Cross
Yen Cross's picture

 Good points! Thank goodness I read fast! Sea monsters area stretch! Top calling Troll?

 

  A little help?          OKYEN! I'm on my own.   

 

                                                                  Lets////// Fetch Moby DICK!   ARRRRR

Sat, 06/25/2011 - 04:59 | Link to Comment Sizzurp
Sizzurp's picture

I took my inspiration from "Clash of Titans".  Well I suppose I could have taken it from Ghostbusters, but the Stay Puft Marshmellow Man just didn't seem to do it justice.  Bottom line is that the monetary system in current form is a severely destructive economic force.  Pick your own funny metaphor.

Sat, 06/25/2011 - 08:38 | Link to Comment Fred C Dobbs
Fred C Dobbs's picture

All they are doing is buying a little more time for those in the know to prepare accordingly. 

 

Well said.  We all get mad at what is being done to the precious metals markets but we should be grateful.  It has allowed me to prepare.  I am buying 3 more Saturday.  My only problem is which one.  Is it better to buy a Philharmonic at  usd 1586 or a XF St. Guaden at 1610.  Any opinions?  

Sat, 06/25/2011 - 08:47 | Link to Comment Smiddywesson
Smiddywesson's picture

"Release the Kraken"  LOL, I'm going to steal that line.  Hilarious

Sat, 06/25/2011 - 08:09 | Link to Comment rsnoble
rsnoble's picture

This is why I don't really care to own a bunch of this stuff.  They don't like it, don't want you to own it, eventually they'll figure out a way to fuck you to death for doing so.  Don't get me wrong, if my net worth were more I would buy some but it's not and I can't justify owning something someone else wants to see crash.  Technically the GLD chart to me lookes poised to drop.  The only way I personally see gold working for you if there were just a complete flat out collapse in which the gov't was actually rendered totally unable and therefore couldn't jack with your stack.  Then we advance to the ultimate tin foil hat comment and get to the topic of who's gona want a bag of shiny fucking rocks in the end?  I've been building up stocks of things like cases of whiskey.  Obviously I can't afford warehouses full but I might have enough to stuff to help me thru some rough patches.  If I don't stop reading this shit everyday I may end up drinking it all though.

Sat, 06/25/2011 - 09:02 | Link to Comment Smiddywesson
Smiddywesson's picture

Not owning PMs because the central banks are motivated to attack the price is exactly why you should own them.  If things were stable and sustainable, I could rely upon the central banks to continue to play with the price, and then PMs would be an awful investment.  However, things are not stable.  We have reached the point of no return, there is nobody to bail us out and the currency will be destroyed.  When it happens, the motivations of those who are attacking the price now will flip to desiring a higher gold price.  The central banks of the world are buying.  They are not doing so to lose money.  They have demonstrated they have ample ability to drive down gold prices, so I have to assume they have a similar ability to drive prices higher.  I have no way of knowing how much higher, but sitting on a lot of gold at sky high prices is a great way of eliminating debt, and they have run up one hell of a debt load.  This is their only way out short of admitting they were wrong and ceding power.  They will never admit they were wrong, and they will never surrender control.

In my book, $55,000 gold isn't so crazy.  Gold prices have to increase enough to make the gold the banks are sitting on worth more than the debt they owe.  That's going to be a very high price.  The amount of gold they were asking for as collateral in exchange for the Greek bail out a month or so ago came out to $44,000 per ounce.  Now they know Greece won't ever pay this back, so there's only three explanations:

1.  They are just buying time and are willing to lose the money

2.  They know it's all funny money that is worthless anyway

3.  The gold will soon be worth that much

 

There's also a combination of the above.  They know the fiat will soon be worthless, so any amount of PM is worth something and the ratio of bail out money to gold is irrelevant.  Still, it's an interesting idea to see if other bailouts with gold as collateral work out to a similar ratio.  That really would be something.

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