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Buy PHYSICAL Gold. NOW: The Discount of a Lifetime: Or Why You Must Abandon the Fake Paper Gold Market

Gordon_Gekko's picture




 

 

For previous articles by the author go to: Gordon Gekko's Blog - http://www.gekkosblog.com

 

They just showed their hands. The paper Ponzi pyramid is wobbling. It’s time to go in for the kill.

 

Let me explain. But first let’s get a handle on what’s happening:

 

“We’ve traded gold for nearly four decades and we’ve never … ever… EVER… seen anything like what we’ve witnessed in the past two trading sessions,”

 

Dennis Gartman, via The New York Times

 

“This is an orchestration (the smash in gold).  It’s been going on now from the beginning of April.  Brokerage houses told their individual clients the word was out that hedge funds and institutional investors were going to be dumping gold and that they should get out in advance…it is the Fed’s concern with the dollar because the dollar is being printed in huge quantities at the same time that other countries are abandoning the use of the dollar as international payment.

 

The exchange value of the dollar is (being) threatened, and if that collapses the Fed loses control over interest rates.  Then the bond market blows up, the stock market blows up, and the banks that are too big to fail, fail.  So it’s an act of desperation because they’ve got to establish in people’s minds that the dollar is the only safe place, it is the only safe haven, not gold, not silver, and not other currencies.

 

And to help protect this policy they have convinced or pressured the Japanese to inflate their own currency.  The Japanese are now going to print money like the Fed.  They are lobbying the ECB to print more.  So I see this as a dollar protection policy...I know where the gold is coming from in the market, it’s just paper.  It’s naked shorts, there is no gold there.  If somebody wanted to take delivery on those contracts nobody would be able to provide it.  I don’t know what the source of the (physical) gold is...

 

..I think the power of the West has already been lost.  When you have off-shored your manufacturing and professional service jobs, you’ve hollowed out your economy.  So gold or no gold, the United States economy has been severely damaged and I don’t think it can recover...

 

This gold business (smash in price) is something to do with the dollar….They are trying to destroy gold as a (safe) haven from the dollar in order to carry on the Fed’s policy of negative real interest rates.  That is what is driving the illegal policy of selling naked shorts in order to manipulate a market.  If you and I were to do something like this without the government’s instruction or protection, we would be arrested.  So the fact that it’s illegal, being done by the authorities, tells me that they are seriously worried about the dollar.

 

(All emphasis mine.)

 

Paul Craig Roberts, Former Assistant Secretary of the Treasury (via King World News)

 

If there is one thing this latest shock-and-awe “theater” in the Gold market tells us, it’s that the government and banksters (i.e. the oligarchy) must be REALLY pissing their pants. It doesn’t show their strength – it lays bare their weakness. They just made it abundantly clear (again) how important Gold is in their scheme of things. A rapidly rising Gold price would reveal the utter fraud of their paper money Ponzi scheme and reveal them as simple hucksters, charlatans and scamsters counterfeiting money and hiding behind all the elegant regalia. The emperor would be naked. Can’t let that happen. The franchise of the paper dollar – arguably the most profitable franchise in history enabling theft on a global scale - must be protected at all costs. Something is or must be about to go seriously wrong with their empire of fake paper money (perhaps the recent gyrations in the JGB market is a tell).

 

With this recent paper Gold market “drama” they have only shown their desperation and weakness. The level of their desperation this time is so great that they had their bought-and-paid-for shills in the media mouthpieces attack and mock Gold and its buyers even before the sell-off (which further goes to proves that it was orchestrated; I’ll provide more evidence below). Consider this in an article “Lust for Gold” which appeared in the New York Times on the 11th April by none other than the lead bankster shill and cheerleader Paul Krugman:

 

After all, historically, gold has been anything but a safe investment…John Maynard Keynes famously dismissed the Gold standard as a “barbarous relic”, noting the absurdity of yoking the fortunes of a modern industrial society to the supply of a decorative metal…for a while, rising gold prices helped create some credibility for the goldbugs even as their predictions about everything else proved wrong, but now gold as an investment has turned sour, too. So will we see prominent goldbugs change their views, or at least lose a lot of their followers.

 

Its funny how the paperbugs liken Gold buyers to a cult, while not realizing they themselves sound like one, with their irrational faith in and defense of paper money (well, not completely irrational - they know where their next paycheck is coming fromJ). While I may provide a full rebuttal to Mr. Krugman in a later article (it barely deserves one, childish and inane as it is), I will point out this: If Gold is so inconsequential and such a “barbarous relic”, why is the government lapdog media busy trying to discredit it and all those who buy it? I mean just look at the sheer gloating:

 

From the Business Insider:

 

The WSJ also joined in the fun:

 

 

I’ll tell you why - because underneath all the bullshit they are spewing they know that buyers of Gold are not actually buying anything but voting against their paymaster government and bankster oligarchy. There is nothing spectacular about Gold except for its ability to reveal the truth about the scam being run by our ruling feudal masters, and this is the one and only reason why Gold and all those who buy it are so vilely derided by the establishment.

 

The global economy is still in shambles and the oligarchy have shown that they can’t do ANYTHING of ANY real consequence except manipulating the public opinion – either via “market” shenanigans or media mouthpieces. Just think about it – a global empire, a powerful and apparently invincible oligarchy threatened by just an inanimate piece of metal. But they know that because all their power is based on lies and deception, a simple truth - the rising price of Gold indicating the massive dilution of currency - can completely destroy it. Having become thoroughly corrupt, impotent and incompetent, unable to fix anything (they couldn’t run a lemonade stand if their lives depended on it) and fast becoming desperate with Gold having risen more than seven-fold from about $250 in 1999 to $1900 in 2011 exemplifying the worthlessness of their paper money and reality catching up to them, they did the only thing they knew: attack the messenger - Gold. It’s a short term fix which perpetuates their paper money franchise and thus their power, but longer term it’s meaningless. It doesn’t fix the massive misallocations which have occurred and are occurring due to central control of money via the paper money system and it doesn’t change one bit of the truth of the present dilapidated state of our economy and society which is a direct result of it. In fact it’s making the situation worse as by not allowing the misallocations to correct and reallocation of capital to productive hands to occur, huge amount of scarce resources – both human and material – continue to be wasted on unproductive enterprises.

 

Unless and until the following factors are no longer true, there is and will remain a case for buying Gold. These factors did not vanish overnight because of a single orchestrated plunge:

1.      Exponentially increasing Government and private debt

2.      Exponentially increasing money supply

3.      Consistent rise in the price of items of daily need (yes I know there is no “inflation” but anybody who goes to the supermarket knows what a crock of bullshit the government CPI numbers are)

4.      Rising unemployment and falling incomes

5.      Corrupt government and politicians

 

The banksters are acting like a child throwing a tantrum because daddy (Gold) is going to take their toy (paper money) away from them, so they simply wail and try to hit back at daddy, as if that would accomplish anything. People who know the truth should simply sit back and laugh at the banksters and their shenanigans while using the opportunity to buy even more.

 

The Discount of a Lifetime

 

The way this price fall occurred makes it clear that there were NO fundamentals behind the move and, paradoxically, strengthens the case for Gold even further. Let’s take a look at exactly how this latest plunge in Gold price happened (via Ross Norman):

 

The gold futures markets opened in New York on Friday 12th April to a monumental 3.4 million ounces (100 tonnes) of gold selling of the June futures contract in what proved to be only an opening shot. The selling took gold to the technically very important level of $1540 which was not only the low of 2012, it was also seen by many as the level which confirmed the ongoing bull run which dates back to 2000. In many traders minds it stood as a formidable support level... the line in the sand.

 

Two hours later the initial selling, rumored to have been routed through Merrill Lynch's floor team, by a rather more significant blast when the floor was hit by a further 10 million ounces of selling (300 tonnes) over the following 30 minutes of trading. This was clearly not a case of disappointed longs leaving the market - it had the hallmarks of a concerted 'short sale', which by driving prices sharply lower in a display of 'shock & awe' - would seek to gain further momentum by prompting others to also sell as their positions as they hit their maximum acceptable losses or so-called 'stopped-out' in market parlance - probably hidden the unimpeachable (?) $1540 level.

 

The selling was timed for optimal impact with New York at its most liquid, while key overseas gold markets including London were open and able feel the impact. The estimated 400 tonne of gold futures selling in total equates to 15% of annual gold mine production - too much for the market to readily absorb, especially with sentiment weak following gold's non performance in the wake of Japanese QE, a nuclear threat from North Korea and weakening US economic data. The assault to the short side was essentially saying "you are long... and wrong".

 

The CME's 10% reduction in the required gold margins in November 2012 from $9133/contract to just $7425/contract made the market more accessible to those wishing both to go long or as it transpired, to go short. Soon after we saw the first serious assault to the downside in Dec 2012, followed by further bouts in January 2013 - modest in size compared to the recent shorting but effective - it laid the ground for what was to follow. One fund in particular, based in Stamford Connecticut, was identified as the previous shorter of gold and has a history of being caught on the wrong side of the law on a few occasions. As baddies go - they fit the bill nicely.

 

The value of the 400 tonnes of gold sold is approximately $20 billion but because it is margined, this short bet would require them to stump up just $1b…. By forcing the market lower the Fund sought to prompt a cascade or avalanche of additional selling, proving the lie ; predictably some newswires were premature in announcing the death of the gold bull run doing, in effect, the dirty work of the shorters in driving the market lower still1.

 

(All emphasis mine.)

 

If someone is selling anything, the rational thing to do would be to get the best price possible, right? Would you get the best price if you sell your lot in one go flooding the market? Would you want to overwhelm all the bids and crush the price? Yes, but only if exactly that was your objective – to crush the price. Nobody sells 400 tons (!) of gold in one go if they are trying to get the best possible price. So this wasn’t a case of varied market participants selling their gold holdings having considered the fundamentals for Gold and arrived at the conclusion their long position didn’t make sense anymore. This was a case of concerted selling by one single entity whose sole intention was to drive down the price. Not only that, nobody sells $20 BILLION worth of Gold in ONE GO without some sort of state/CB backing. You think some piddly hedge fund manager would have the balls to do this while risking prosecution and jail time? So not only was this market manipulation, but state-sponsored market manipulation completely unrelated to the reality and the fundamental basis for buying Gold, which remains as strong as ever.

 

But it gets better. While this is the probably the most spectacular takedown of the Gold price ever, but by no means is it the first or the only one. Anyone who has actually traded the Gold futures market for any length of time knows that this happens on a regular basis. So basically the government/Central Banks use the paper gold futures market as a price control mechanism for Gold (of course, they can’t impose price controls on Gold overtly as it would reveal the lie - if Gold is a barbarous, meaningless relic why would you need to impose price controls on it?). But what happens when price controls are imposed on something? Shortages start to occur resulting in an even greater moonshot in price than would have otherwise occurred. A “black” market (which is actually the free market at play and depicts the true price of the commodity) eventually emerges where it sells at a premium to the official price. There are two reasons for this:

1.      Buyers - aware that the commodity/good is available at a discounted price - beat a path to the door of whoever is foolish enough to sell it at the government mandated price. Availability at that price soon runs out.

2.      The good becomes even scarcer as the costs of producing and selling it are no longer covered by the government mandated price. Aware of this, sellers withdraw from the market and demand ever higher prices for the good.

 

And remember: for marketable goods, the “out” is money, but the only “out” for money is a superior form of money. When the paper currencies become unstable, the only “out” is Gold so you can be sure there will be no lack of buyers, only sellers – and there is no upper limit to high it can go. Theoretically, the price will be infinity when no seller is willing to sell Gold in exchange for paper. You want to be “out” of paper before we reach that event horizon.

 

If the rigging in the futures market keeps continuing, the futures price at some point will decouple from the physical and become meaningless. This is exactly why you should use this opportunity to buy as much physical as possible at discounted prices while there are foolish sellers still willing to sell at the stated official (futures) price. I’m sure many of you remember Gold’s spectacular fall from about $1000 to $680 circa 2008. How many of you have regretted not buying at those levels while you have been watching Gold’s inexorable rise since? You’ve been waiting for a price drop, haven’t you? So what are you waiting for? We saw the same scary headlines in the MSM that we are seeing now with the same bullshit reasons – while the reality hasn’t changed ONE BIT. Some media mouthpieces are proclaiming a bear market in Gold has begun while others are hoping that their paymasters’ moronic ideas are finally working but remember this is the same media that sold you real estate before the bust, the same media that sold you DOW 36000, the same media that sold you Obama’s “hope and change” and has pilloried gold and gold buyers whenever its price crashes but has been largely silent throughout the past 13 years of the gold bull run. There’ve been many of you saying Gold is too expensive and waiting for an opportunity to buy in. Well, the banksters in using the futures market as a propaganda vehicle against Gold have unwittingly provided you with one. Overcome your fears for fortune favors the brave. It’s time to go in for the kill.

 

Don’t Pick Pennies In Front of The Steamroller – Get Out Of The Paper Markets

 

First, you must be clear why you are buying Gold. Sure, paper gains are nice to have but are only a side effect. The real reason is this (from one of my previous articles):

 

Any type of financial asset that has a counterparty – which is pretty much all the paper assets in the world – bonds, futures, any and all derivatives and yes, even the paper currency – will crash. What will they crash against? Yes, that’s right - Gold. All the world’s capital – trillions, perhaps quadrillions of it - will come rushing into the very tiny physical (NOT paper) Gold market. Remember, the world’s real physical capital – real assets such as land, oil-refineries, mines, infrastructure, etc. will not vanish, only it will be re-priced in terms of Gold and its ownership transferred to those who hold it. Since everything stays on this planet, it is a zero-sum game and the winner will be Gold. In other words, an ounce of physical Gold will command a lot more in real purchasing power than it does today. Just like a national currency is a claim on goods and assets within that country, Gold will be a claim on global goods and assets worldwide.

 

In other words, wealth preservation in the face of a currency collapse and an insurance policy against the idiocy and depredations of our monetary masters.

 

For those of you who have read my work, this current smash shouldn’t come as a surprise. In fact – not to beat my own drum – but if you understood and followed my advice, you would have been out of the paper markets and not affected one bit by these shenanigans. If you wish to trade the paper market for short term paper gains, by all means do it (at your own risk though - and you just saw what that “risk” looks and feels like), but in the end always – ALWAYS – convert those paper gains to real profit by buying the physical metal because Gold will never ever attain its true price in the futures markets. They can always issue an unlimited supply of naked paper contracts. The following extract from one of my previous articles explains the reality of the futures market:

 

The futures market is nothing but a tool for the dollar managers (US Government/Fed/Bullion banks) to manage/control the price of Gold. Any rational observer with an iota of brain who has watched the gold market for any reasonable length of time can tell that the price is intentionally driven down during the Comex trading hours. If you don’t believe this, either you’re in denial or worse – collusion - and IT WILL end up costing you big time. Given the massive, concentrated and long-term (the entire past decade - they haven't been net-long - not once - during that time period) nature of their short positions, it really isn’t that hard to deduce that the banks do not nearly have enough metal to cover their shorts and that the sole intention of the massive short position is to control the price. Whenever the price rises (or threatens to rise) the big bullion banks ala JP Morgan create massive naked shorts introducing fake supply of Gold in the market, thus driving the price down. “But the price has been rising for the past decade, hasn’t it? So how can you say they are driving it down?”, many people ask. Well, the constraint on the bullion banks has been the availability of the physical metal. If the metal is not available, the fraud of the paper market is exposed and they lose their price managing ability. So they allow the price rise to a level at which there are some weak hands willing to sell and then they hold it there till all the sellers have been exhausted (I am assuming the Fed has already sold all the US Gold during the past decade). So strong are Gold’s fundamentals that despite the massive rigging, all they have been able to do is slow its rise. The weak hands who sell the physical metal at every price rise have helped them in this endeavor. But soon, as the bond market implodes, they will run out of sellers. Treat the availability of real metal at today's paper price a gift and buy as much as you can.

 

To those who think that the Comex shorts will be crushed one day and the price of paper Gold will do a moonshot, to them I will say that you are dreaming. The Comex shorts will be crushed, but not in their own casino! If and when a majority of paper Gold longs demand delivery a force majure (who do you think the US Government will side with?) will be declared with cash settlements and/or offers of equally worthless GLD shares (don’t tell me you didn’t know about this). By some accounts, this is already happening. What will happen to the paper price then? That’s right – it will utterly collapse even as the physical’s price is rocketing. Paper gold holders will dump it all to buy the physical – which, unfortunately – will most likely not be available at all…in light of the sum total of the recent developments mentioned in this update I think it is too risky to be trading right now and one should just sit 100% in physical Gold and some currency for day-to-day needs…Trading paper markets for paper gains is like picking up pennies in front of the steamroller. It’s time to stop trading and just buy the physical metal….

 

They don’t have nearly enough Gold to cover all the contracts they’ve sold in the market. If you’ve bought one, stand for delivery. I’m sure many will be offered cash premiums in place of Gold. Refuse. Demand the metal. This is the right time to tighten the screws on them while they are vulnerable having sold 400 tons of non-existent Gold in the market. Getting out of the fake paper market and collapsing it will have a threefold benefit:

1.      Buying physical with cash preserves your anonymity and safeguards your wealth in your hands away from the prying eyes of the looters posing as “the government”.

2.      Counterparty risk is eliminated as there is none. You’re home free.

3.      The fake paper market will collapse due to non-availability of the physical and non-participation of the majority. The sooner it happens, the sooner Gold will attain its true value and the emperor will be naked for all to see. This fake money system needs to collapse so the work of reallocation and rebuilding can begin. The cancerous tumor of banksters needs to be eliminated from the economy.

 

Make no mistake, this is a war. A war for your freedom, liberty and life. They have won the battle but they are not going to win the war. It is upto you to make sure they don’t take you down with them. Those buying gold are not in it for the short term pleasure of paper profits but because they understand that it is the only way to safeguard your wealth and a claim to a chair when the music of the paper pyramid Ponzi finally stops.

 

To me, the only question is: Who Would I Trust With My Wealth?

 

This:

 

Or This:

 

 

The best time to buy is when there is blood in the streets. That time is NOW.

 

So don’t panic. Just buy the physical, sit back, relax and enjoy the show!

 

 


 

1. Some people may find this description of events to be too “conspiratorial”, but rest assured, if anyone does the diligence, I’m sure they won’t find things differently. This is how things are “done” in the “markets” today.

 

 

 

 

 

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Wed, 04/17/2013 - 13:16 | 3461730 RougeUnderwriter
RougeUnderwriter's picture

 If there’s one thing I learned in prison it’s that money is not the prime commodity in our lives… time is.

---Gordon Gekko:

Wed, 04/17/2013 - 13:11 | 3461712 SILVERGEDDON
SILVERGEDDON's picture


I have to poop.  Paper sucks, you Wall Street fucks! I'll see you vampires in the sun, with my loaded silver gun. Yer goin' down in flames, from Lower Manhattan to the Thames. Your paper is I know not where, I'd rather shit my underwear!  For, be there bull, or be there bear, silver is the suit I wear! (With gratitude, and apologies to Dr. Seuss.)

 


The only paper I own is the stuff I wipe my ass with. Market paper is worthless, because I cannot do a good job of wiping my ass with it. Gold was worth $28.00 an ounce when I was a kid. Silver was worth whatever was printed on the coin you spent. Any one think those days are coming back? All of the lying bum fucking aristocracy of the Age Of Paper Power can burn in their paper suits soonest. I won't even bother pissing on them to put out the flames.

I collect gold, silver, lead, copper, real dry powder, food, tools, diesel fuel, and other useful commodities. There is a community of folks all doing the same, so skill sets and extra eyes and hands can guard each others sixes, and "break on through to the other side, break on through to the other side, YEAH  "

HFT ain't good for me. 

Credit defaults far as the eye can see.

 

CDS's gonna make some messes. 
Boo hoo hoo as thieves confesses.
 
TBTF gonna fall off a cliff - REAL NEAT.
Wall Street is a bunch of fucking dead meat.

 


Banks used to be so overleveraged bold.


Now, they're layin' bankrupt,dead and cold. Gonna be nothing but prepper people, all the rest gonna be surprised fucked up Sheeple. God bless this mess. I must confess. I'm a fucking poet,

 

and didn't even know it.

 

RISK ON, RISK OFF. DROP YOUR COCKS, AND GRAB YOUR SOCKS, BECAUSE THIS DISNEYLAND RIDE IS JUST BEGINNING !!!!!!!!! 

Wed, 04/17/2013 - 13:04 | 3461664 fijisailor
fijisailor's picture

Buy gold at a major dip or buy stocks at an all time high.  Boy that's a tough decision.

Wed, 04/17/2013 - 12:58 | 3461581 TalkToLind
TalkToLind's picture

Another PM smash is currently in progress.   Just a heads-up for you bitchez on the sideline who are waiting to buy physical GOLD or SILVER.

Wed, 04/17/2013 - 22:34 | 3464711 fourchan
fourchan's picture

sweet i love a discount to reality.

Wed, 04/17/2013 - 12:39 | 3461499 Common_Cents22
Common_Cents22's picture

Physical gold value will rise as an alternative store of wealth to the dollar, as confidence lessens in the dollar gold should rise.

But, gold prices are boosted by the securitization/paper/leveraged gold.   If that busts, couldn't phys gold price drop???   Similar to oil prices when spec bubble popped,  or RE prices when credit bubble popped.

 

 

Wed, 04/17/2013 - 13:25 | 3461834 mayhem_korner
mayhem_korner's picture

 

 

Paper silver is $23...but you cannot take delivery of it for less than $27-$28.  Check the on-line dealers - Apmex, Providence, etc. - the premiums are high.  It's called decoupling, and it's only beginning.  The real worth of physically held bullion is not what is showing up on the CNBC ticker...

Wed, 04/17/2013 - 14:31 | 3462355 Renfield
Renfield's picture

Tell me about it. $100 premiums on gold and $7 on silver - and that was when we bought 2 days ago. Thank God we spent it all then - I can't imagine what we'd be paying now, and what the availability is. Good hunting, Hedgies.

Wed, 04/17/2013 - 12:34 | 3461451 rsnoble
rsnoble's picture

So this is the absolute bottom eh?

Wed, 04/17/2013 - 12:30 | 3461421 Temporalist
Temporalist's picture

For those that haven't seen this:

Paul Krugman v. David Stockman: The Great Debate Over Gold Continues

http://www.forbes.com/sites/ralphbenko/2013/04/15/paul-krugman-v-david-s...

Wed, 04/17/2013 - 12:27 | 3461386 Douglasnew
Douglasnew's picture

The question you have to ask yourself is Gold or Dollars? Whether 'tis nobler to suffer the slings and arrows of the Fed or to take possession of the barbarous relic? You can not eat either. Neither produces yield. Yet the dollar is paper and being diluted, wantonly and recklessly. First sign of a serious correction and everyone runs back into the burning house but just look at the long term guarantee which is that we will NEVER have the political will to do anything but print more and more to maintain the status quo. Do you have fire Insurance on your home against all odds that it will ever burn? Do you dutifully pay that premium into the ether each year never to be seen again? Well then get yourself 5-10% physical and hold it as you would any Insurance policy and you need not check to see if your house is burning by checking it's price every day. You will surely know when the day comes that you were the wiser to maintain it.

Wed, 04/17/2013 - 12:25 | 3461385 Douglasnew
Douglasnew's picture

The question you have to ask yourself is Gold or Dollars? Whether 'tis nobler to suffer the slings and arrows of the Fed or to take possession of the barbarous relic? You can not eat either. Neither produces yield. Yet the dollar is paper and being diluted, wantonly and recklessly. First sign of a serious correction and everyone runs back into the burning house but just look at the long term guarantee which is that we will NEVER have the political will to do anything but print more and more to maintain the status quo. Do you have fire Insurance on your home against all odds that it will ever burn? Do you dutifully pay that premium into the ether each year never to be seen again? Well then get yourself 5-10% physical and hold it as you would any Insurance policy and you need not check to see if your house is burning by checking it's price every day. You will surely know when the day comes that you were the wiser to maintain it.

Wed, 04/17/2013 - 12:26 | 3461369 TalkToLind
TalkToLind's picture

I received my tracking number yesterday which means my "machine parts" will arrive before the end of the week!  So far there is no tracking number yet for my other 2 orders of "machine parts". 

Wed, 04/17/2013 - 12:23 | 3461365 jomama
jomama's picture

i did my part.  they had no problem taking my bennybux.  we'll see how long it takes for the metal to arrive, however.

only reason i didn't go through my local dealer is because i knew he was getting killed with this price smash.

Wed, 04/17/2013 - 11:38 | 3461101 All Out Of Bubblegum
All Out Of Bubblegum's picture

Buy silver, not gold. Wait for the ratio to drop next year and trade silver for gold.

Wed, 04/17/2013 - 14:39 | 3462396 Renfield
Renfield's picture

Buy both. We've been stacking silver ever since we panicked into gold in 2007. (A bit late, but we are not "financial" people and did not know before then.) Our little household sees gold & silver as companions, a hard metallic currency. I am not convinced that gold will be more available next year to buy, than it is this year. Actually I'm pretty sure both gold and silver are going to get scarce.

We did "speculate" a little, buying some platinum too....

Wed, 04/17/2013 - 12:14 | 3461329 El Hosel
El Hosel's picture

Maybe a good time to pay back the Germans, JPM and Benny going to get er done early?

Wed, 04/17/2013 - 11:36 | 3461082 the grateful un...
the grateful unemployed's picture

Most of this is factually incorrect, there is no conspricacy theory, except that when the Fed loses control over interest rates, the price of gold will drop, according to the record of the most recent market interventions by raising rates to cool off the commodity bubble. Gold could very well lead all ASSETS lower, and the Fed doesn't want that. 

put the emotion aside for moment. the market is losing faith in the Fed, but its like losing faith in ELECTRICITY. The Fed is always going to be kind to them, but, sometimes the power goes out, sometimes they raise the cost per KWH. Sometimes people find better alternatives, like SOLAR. all the Fed has to do is keep the lights on, pay no attention to that flickering lamp.

if you believe gold could fall, buy the physical and short the paper. that way your cost basis is set when you close the position. one suspects the CBs are doing this right now. (take a TIP from Bill Gross and do what the Fed(s) do)

Wed, 04/17/2013 - 12:15 | 3461331 BlackSunshine
BlackSunshine's picture

Agreed about factually incorrect. Many of these ZH articles I use as contra indicators.

The paper gold market is as valid as the paper hog market, paper cattle, paper OJ, in that they are all leverageable 20:1. That's your conspiracy, margin leverage. Delivery of physical assets are rarely made and any commodity, it's called provding liquidity to the futures market.  

Wed, 04/17/2013 - 13:04 | 3461658 the grateful un...
the grateful unemployed's picture

if USG wanted to they could roll back margin spreads themselves and knock the hell out of gold, but in its in their interests to keep all asset values high, especially MBS paper. thats your damned conspiracy.

Wed, 04/17/2013 - 12:26 | 3461387 GoldForCash
GoldForCash's picture

Gold 100:1. Silver 1000:1

Wed, 04/17/2013 - 10:54 | 3460788 Jena
Jena's picture

Great article, G.G..  When I see the ads urging people to sell their gold jewelry and old coins I just shake my head and feel sorry for the poor slobs who fall for it or have to do so because circumstances require it.  This smackdown means nothing to those who are in it for the long haul. 

Trust Krugman/Bernanke?  Never!

Wed, 04/17/2013 - 11:26 | 3461007 Geruda
Geruda's picture

The people who are having laffs that are the last laffs people are having are having laffs that are the hardest laffs peoples are having.

 

 

The departure of Jon Nadler from Kitco was not only long overdue (and the wording of their release strongly suggests he was let go), but one of the few instances where gloating is most appropriate.

Nadler forecast a bubble building under gold due to ETFs and other factors and predicted a massive correction. He did recommend that investors keep gold as an insurance position, not as an investment.

In the same announcement Kitco said Peter Hug, Global Trading Director for Kitco Metals, and Jim Wyckoff, Senior Analyst for Kitco Media, will contribute regularly to the commentary section.

Wed, 04/17/2013 - 11:00 | 3460817 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

GG!!!! So cool to see you here, it's been awhile, hasn't it? Glad to see you are still around. Now if more ole timers would chime in, that would be cool.

Get your physical gold now.

XOXO

Wed, 04/17/2013 - 15:47 | 3462831 Gordon_Gekko
Gordon_Gekko's picture

Thanks Cindy. I posted another article like a month ago (you can read it here: http://www.gekkosblog.com/2013/03/its-time-to-collapse-system.html), but yeah I was absent for a while before that.

Wed, 04/17/2013 - 10:34 | 3460701 IamtheREALmario
IamtheREALmario's picture

To say the obvious ... the value of gold is what you can trade it for. Who determines that?

Wed, 04/17/2013 - 11:01 | 3460827 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

If you have to ask, well, sex is also a SHTF negotiable. Work on that instead ;)

Wed, 04/17/2013 - 10:36 | 3460712 CH1
CH1's picture

the value of gold is what you can trade it for. Who determines that?

The person you trade it with.

Wed, 04/17/2013 - 13:05 | 3461663 Rory_Breaker
Rory_Breaker's picture

He who has the gold makes the rules!

Wed, 04/17/2013 - 10:33 | 3460697 SmallerGovNow2
SmallerGovNow2's picture

+100,000 up arrows...

Wed, 04/17/2013 - 10:05 | 3460581 Shell Game
Shell Game's picture

Thanks, GG.  Buy now, I absolutely agree.  It is becoming clear to all who are paying attention that the paper ponzi market and the physical market are decoupling - big time.  

Wed, 04/17/2013 - 10:49 | 3460763 mess nonster
mess nonster's picture

No, the real disconnect is between emotional motives and common sense regarding gold.

Emotion has always clouded people's thinking about the yellow metal. Let's clear the mental fog:

Why are you buying physical gold in a manic frenzy?

Because you are scared. Fearful. Panicky. You know the world's fianaical system is a hgiant tottering ponzi scheme, and you know that when it collapses, you will be ruined. Naturally, you want to protect yourself and your family.

Gold is tangible. It is shiny, yellow, lustrous and heavy. Often it comes stamped with official numbers or pretty pictures. Therefore it must be a safe hedge against the madness that looms darkly over your quiet life in your suburban cul de sac.

But how is gold going to protect you? Gold never loses its purchasing power. But it never gains any purchasing power either.

A pound of gold today will buy you a new economy car. In 1935, a pound of gold would buy a new economy car. The value of gold never changes. But gold is not that liquid. How are you going to spend it, should your worst fears, the ones that made you buy gold in the first place, come to pass?

Most people assume they'll be able to convert gold back into fiat currency when the time comes. ...but wait! Isn't that assumption just a vote for the continuation of the fiat ponzi system? In cases like this, buying physical is actually a vote of coonfidence in the current fiat money fraud.

So what if the fiat system does collapse? There are several scenarios:

1. Hyperinflationary blowout: It's Wiemar Germany all over again, and cash has to be carted around in wheelbarrows. Now your physical gold is worth a gazillion dollars per ounce. Whoop de do. You're rich. Your 16, 1 oz krugerrands can buy you a new car, just like it always did.

2. Deflationary crash. It's the Depression all over again. Your gold is now worth 35 dollars an ounce. Bummer. Hey, at least a pound of the stuff will still buy you a new car!

3. One  of the above, plus government confiscation. You bought all that gold, and now they've stolen it from you. You're not just a sucker, from the govt's POV, you're a free gold repository!

4. Mad Max sceanrio. There is no government, no economy, no paper currency. It's a lawless world of total chaos. I suppose your stash of gold gives you peace of minid, now that you're homeless and starving. Now a pound of gold will buy you some bread, or a pair of shoes, or a few rounds of ammo. What an investment!

If gold makes you feel better, then buy some. But please, don't fool yourself that it's some sort of "investment". The only people who actually make money from gold are dealers.

 

 

Wed, 04/17/2013 - 19:39 | 3464021 debtandtaxes
debtandtaxes's picture

1. My gold can "buy me a new car" - or all the food I need to feed my family for a year while others must have a wheelbarrow of paper to buy one loaf of bread.

2. My gold can "buy me a new car" - or all the food I need to feed my family for a year while there are no jobs and no way to earn more fiat.

3. My gold was bought without receipt from small dealers.  No one knows.

 

And that is why *I* buy gold.

Wed, 04/17/2013 - 13:07 | 3461695 Vooter
Vooter's picture

"Why are you buying physical gold in a manic frenzy? Because you are scared. Fearful. Panicky."

I buy it out of spite and hatred. And if it stops being effective, I'll move on to doing other things out of spite and hatred.

Wed, 04/17/2013 - 13:01 | 3461639 Bloodstock
Bloodstock's picture

Some truth here. If gold is such a great investment, why are the dealers trading for paper? Just sayin'.

Wed, 04/17/2013 - 14:04 | 3462139 hootowl
hootowl's picture

To pay their taxes and bills.....Besides what else could they trade it for....potatoes?

 

STARVE THE BEAST!!!

Wed, 04/17/2013 - 12:49 | 3461548 Shell Game
Shell Game's picture

Why are you buying physical gold in a manic frenzy?

 

This question alone belies the fact you are a fucking idiot with an agenda.  OR(AND), it is you who are afraid to make the mental leap of courage it takes to disconnect from this corrupt and doomed system.

 

In all of your rant you did not mention what you would use to protect your labors and savings. Please, do share your 'wisdom'...

 

Wed, 04/17/2013 - 12:25 | 3461384 Panafrican Funk...
Panafrican Funktron Robot's picture

"But please, don't fool yourself that it's some sort of "investment"."

I agree.  It's merely a store of wealth.  It has a risk adjusted real (not USD nominal) ROI of zero.  If you can convince me that stocks or bonds would produce a superior risk adjusted real (not USD nominal) ROI in this regard, I'm all ears.  

Families that are actually wealthy (multi-generational), typically have most of their wealth in real assets.  Specifically:

Land/durable structures

PM's

Art/Antiques

But, by all means, show me where they are wrong in doing so.

Wed, 04/17/2013 - 12:25 | 3461380 jomama
jomama's picture

nice try, i bought because i know it's an incredible deal right now.

it's really just as simple as that.

Wed, 04/17/2013 - 11:47 | 3461153 Tinky
Tinky's picture

"The value of gold never changes."

That is nonsense. There are both times when it is overvalued, and times when it is undervalued.

Wed, 04/17/2013 - 11:30 | 3461049 Geruda
Geruda's picture

Your speaking is having much wise words to be saying.

 

  Many times this man was having the same kind of words to be speaking...

The departure of Jon Nadler from Kitco was not only long overdue (and the wording of their release strongly suggests he was let go), but one of the few instances where gloating is most appropriate.

Nadler forecast a bubble building under gold due to ETFs and other factors and predicted a massive correction. He did recommend that investors keep gold as an insurance position, not as an investment.

Wed, 04/17/2013 - 09:50 | 3460515 DoneThis2Long
DoneThis2Long's picture

Excellent insightful article BTW.

Wed, 04/17/2013 - 09:34 | 3460426 GeezerGeek
GeezerGeek's picture

I think I'll buy a few pressure cookers in which to store what little gold of mine that remains above water. Placing the gold in pressure cookers will sure give them pause when they come to take it. Does anyone know if gold is detectable when stored thusly?

Wed, 04/17/2013 - 09:26 | 3460386 the long view
the long view's picture

Thanks for this thought-provoking essay.  It explains why msm financial pundits called Dr. Ron Paul a nut for wanting to audit the Fed and the gold bullion stores.  To put the current dollar in perspective, "The Battle of Bretton Woods" traces the history from the beginning of the Fed up to the present.  Since all fiat currencies have ended the same way throughout history, why would the abused dollar be any different?   These are perilous times, and gold/silver bullion a must for retaining wealth long-term.  

Wed, 04/17/2013 - 09:54 | 3460532 d edwards
d edwards's picture

I agree. Something to also beware of is gov't confiscation of gold, like the 1930"s.

Won't be so easy-people smart enought to own pm's are also aware of how corrupt gov't is.

The Au, along with firearms will need to be pried from "cold, dead hands."

Give up either and you are totally at the tender mercies of gov't-and the history of the 20th century shows how well that works out.

Wed, 04/17/2013 - 10:37 | 3460717 CH1
CH1's picture

Something to also beware of is gov't confiscation of gold, like the 1930"s.

Not likely. What IS likely is that they will tax every person who bought gold with a paper trail. Like a 75% tax.

Wed, 04/17/2013 - 13:01 | 3461644 KnightTakesKing
KnightTakesKing's picture

Very unlikely. Retroactively tax gold purchases? Anyhow, how does the government explain taxing a $50 US coin of "legal tender"?

Wed, 04/17/2013 - 15:49 | 3462837 RockyRacoon
RockyRacoon's picture

Easy one.  They demonetize it as legal tender.  Problem solved.

It would be hard to do today, but the fatal day could come in a disorganized frenzy of "Congress doing something" to solve the "problems".

Most folks wouldn't care anyhow as they don't own any.

Who would have suspected that gold would be confiscated in 1933?  Surprise!

Executive Order 6102
Wed, 04/17/2013 - 10:05 | 3460577 DoneThis2Long
DoneThis2Long's picture

Just look at the insensitive prick in the WH and do you have any doubt that he'll do anything to do just that - kill anyone not going along?

He gave a rat's ass about the Grandmother that raised him, so why would he care of you, I, our kids or anyone else? This asshole is a survivor. He did not get from a pot-head nobody's child to the illegitimate head of the US by being sensitive (in spite of the "tears" during Sandy Hook speech).

Wed, 04/17/2013 - 09:50 | 3460427 DoneThis2Long
DoneThis2Long's picture

Isn't it ironic that ~2-3 years ago, the formely Top Secret number of nukes we had in our arsenal was revealed by the Clintonessa - during the "Start" joke - yet, the amount of gold in "Fart Knox" remains a Top Secret?

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