This page has been archived and commenting is disabled.

The Lies of Nouriel Roubini and Gold

smartknowledgeu's picture





 

lies of the financial elite

On December 15, 2009, when gold was trading at $1122 per troy ounce, Nouriel Roubini stated, "Since gold has no intrinsic value…there are significant risks of a downward correction rather than a rapid rise towards $2,000, as today’s gold bugs claim” and gold “looks suspiciously like a bubble”. A 35% drop after a bubble bursting is a reasonable fall for “bubble” talk, which would have sent gold into the low $700s per ounce. A month earlier, Roubini had declared, “gold at $1,500 is utter nonsense.” So how did gold perform after Roubini hawked his “gold is a bubble” message all over the news? Not only did it never retreat back to $700 after Roubini ranted against gold, but it never retreated back to $800 or even $900, and in fact it soared to above $1,900 an ounce less than two years higher, a 69% surge higher that not only crushed Roubini’s “gold at $1,500 is utter nonsense” declaration, but made Roubini’s prediction of gold’s future price behavior utterly wrong by more than 100%.

After Roubini was so ridiculously wrong and seasoned gold advocates were right back then, one would think Roubini would think twice about opening his mouth again when making predictions about gold. But nope. He’s back at it again, as his only purpose in the media and in the institutional educational system seems to be to serve as a shill for the banking elite. This week Roubini claimed that gold would retreat back below $1,000 once again, just as he did four years ago and the reasons he provides are as illogical now as they were back then, including sophomoric ad hominem attacks against gold bugs that lack any factual support whatsoever. One would think that if the media were to grant someone that made such a horrendously wrong prediction about gold just a few years ago the spotlight again, that they would discuss his past erroneous predictions to provide some context to his present predictions. However, as I explained in this article, “Independent v. Mainstream News: A Choice of Being Informed v. Being Re-Educated”, mainstream media has evolved today to behave as the propaganda division of the fascist corporate banking –government conglomerate. Today, financial journalists employed by mainstream media typically just repeat what they are instructed to tell the world by their employers without any foresight, critical thought or journalistic introspection.

So let’s take a look at Roubini’s arguments for sub-par $1,000 gold. Roubini states six primary reasons “why gold prices are likely to move much lower, toward $1,000 by 2015” even though all six can easily be dismissed as falsehoods simply by looking at the facts and ignoring Roubini’s unsubstantiated rhetoric. So let’s analyze all 6 of his statements:

 

(1) "Gold prices tend to spike when there are serious economic, financial and geopolitical risks in the global economy."

This statement implies that there are no serious economic financial and geopolitical risks in the global economy, an incredulous statement if one merely looks at the facts and ignores various banker and politician declarations of economic recovery buttressed by falsely compiled economic statistics. Economic growth in India is the lowest in a decade, economic activity in the Eurozone has declined for 6 consecutive quarters, in Greece, Spain, Portugal and Italy, youth unemployment rates vary from 40% to nearly 63%, the May US Manufacturing ISM report was the worst since mid-2009, but yes, according to Roubini, there are no serious economic risks anywhere in the world today.

 

(2) “Gold performs best when there is a risk of high inflation, as its popularity as a store of value increases. But despite very aggressive monetary policy by many central banks…global inflation is actually low and falling further.”

According to whom? According to the Bureau of Labor, “official” inflation inside the US is only 1.1%. But anyone that actually is concerned with facts and knows that the US government has drastically and aggressively altered the inflation formula to strip away all components of inflation over the past three decades will realize that this statistic is a complete lie. But not Roubini, who believes the 1.1% inflation statistic is accurate and truthful. It’s downright scary that he is molding impressionable young minds at NYU. But then again, Roubini is just fulfilling the Rockefeller funded General Education Board’s mission in the 1900s of having young students “yield themselves with perfect docility to our molding hands.”


(3) "Unlike other assets, gold does not provide any income."

Gold since 2001 has risen more than 460%. Obviously with this type of enormous appreciation against the USD and similar appreciation against all global fiat currencies, there has been more than ample opportunity for profit taking and gains to be taken along this journey if one desired. Again, an anti-gold argument that has zero merit if you are a logical person capable of independent thought.

 

(4) "Gold prices rose sharply when real (inflation-adjusted) interest rates became increasingly negative after successive rounds of quantitative easing. The time to buy gold is when the real returns on cash and bonds are negative and falling."

As of May 31, 2013, 5 year treasuries, constant maturities, were yielding 1.05%; 10 year treasuries 2.16%. Shadowstats.com, which complies inflation statistics as they were compiled in 1980 before the government systematically altered the inflation formula to strip out components of inflation from the price index, states that current inflation in the US is about 8.5%. That means for a 10-year investment in US Treasury bonds, you presently have a very substantial real negative rate of return.

 

(5) "Some argued that highly indebted sovereigns would push investors into gold as government bonds became more risky. But the opposite is happening now. Many of these highly indebted governments have large stocks of gold, which they may decide to dump to reduce their debts. Indeed, a report that Cyprus might sell a small fraction – some €400m – of its gold reserves triggered a 13% fall in gold prices in April."

Here, Nouriel transitions into full propaganda mode with the above statement. Reporting that the speculative Cyprus sale, and not the 400 tonnes of paper gold dumped into the futures market within 30 minutes, was responsible for gold’s 13% drop in April is not only irresponsible, it’s factually incorrect. To counter Roubini’s propaganda, note that back in April, that the plan to have Cyprus divest of a portion of its sovereign gold was not a plan of its own suggestion but one that was forcibly shoved down its throat by ex-Goldman Sachs banker and ECB President Mario Draghi. Furthermore, this announcement was made without ever consulting the Central Bank of Cyprus.

 

(6) "Some extreme political conservatives, especially in the United States, hyped gold in ways that ended up being counterproductive. For this far-right fringe, gold is the only hedge against the risk posed by the government's conspiracy to expropriate private wealth. These fanatics also believe that a return to the gold standard is inevitable as hyperinflation ensues from central banks' "debasement" of paper money. But, given the absence of any conspiracy, falling inflation and the inability to use gold as a currency, such arguments cannot be sustained."

Here, Roubini transitions from full propaganda mode into full shameless ad-hominem attack-mode. Note his very careful and deliberate selection of words: "extreme", “far-right fringe”, “conspiracy”, and “fanatics”, in an attempt to marginalize the truth with zero factual evidence whatsoever. Talk about an unsustainable argument! If the best argument one can come up with is one full of sophmoric name-calling devoid of any factual evidence, then one needs to take a re-fresher course in logic. If Roubini had taken just ten minutes to study the data of physical gold and physical silver sales worldwide during this banker executed paper-raid on gold and silver prices, he would realize that he was labeling nearly the entire Eastern hemisphere of Asians as lunatic fringe conspiracists.

 

Fully more than half of the economists I read about in the mass media, if they were forced to accurately dress their role, would have to wear a big red foam nose, oversized shoes and some clown face paint, as they serve no other role in this continuing global economic tragedy other than that of a Shakespearean jester who must distract the people from the truth. Because of shills like Roubini, this is why I still claim today, that “Everything I Learned About Succeeding in Business, I Learned Outside of the Institutional Academic System". One would also be wise to avoid mainsteram academic economists and the mainstream financial press to learn the truth about the current state and dynamics of gold and silver markets.  (Copyright: 2013 SmartKnowledge Pte Ltd. You may republish the above article only in its entirety and with all links intact, including proper attribution to the author as described below.)

 

About the Author: JS Kim is the Founder & Managing Director of SmartKnowledgeU, a fiercely independent research & consulting firm that uncovers the best ways to buy gold and silver and focuses on the realities of this current global economic crisis v. the propaganda of the mainstream financial industry.

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 06/07/2013 - 16:33 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

Just go to Kitco's silver page and have a look at the silver lease rate chart....

And you will clearly see the manipulation in the silver market......

I have watched it (the silver  lease rates) for a longgggg time and it is now CLEARLY broken.

Fri, 06/07/2013 - 17:31 | Link to Comment Remington IV
Remington IV's picture

fascinating

Fri, 06/07/2013 - 16:24 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

I see the .gov sponsered financial terrorist were hard at it today in the bullion market today.

 

Fri, 06/07/2013 - 16:02 | Link to Comment antidisestablis...
antidisestablishmentarianismishness's picture

If making bad calls was a crime everyone around here would be behind bars.

Fri, 06/07/2013 - 15:56 | Link to Comment lasvegaspersona
lasvegaspersona's picture

Any gold writer who discusses the price of gold without considering the mechanism by which gold is priced is not going to be correct very often.

If one can take a mere billion dollars and drop the price almost 300 points (as happened in mid April) without an ounce of physical involved then the market is unstable.

I believe FOFOA correctly assessed things in: http://fofoa.blogspot.com/2012/07/fallacies-1-paper-gold-is-just-like.ht...

The paper gold market is very different that the corn or the copper markets. There is a reason this market was developed in the 1980s and a reason it is soon to fail. The explanations are not simple but the punch line is: hold physical gold. If you need more confidence in this position then you'll have to do some more reading. Check out the declining inventory of GLD: http://www.spdrgoldshares.com/assets/dynamic/GLD/GLD_US_archive_EN.csv

It does not decline every day but it has dropped almost 350 tons since January. The question is where is the physical going??

One does not HAVE TO understand what is happening to take advantage of a soon to be dramatically higher POG but it does help with sleeping at night. The more people understand the more they seem compfortable with higher pecentages of physical gold held as wealth assets.

Fri, 06/07/2013 - 15:47 | Link to Comment fijisailor
fijisailor's picture

Here's a guy who knew how to clean out corruption (and replace it with corrution).

 

http://www.youtube.com/watch?v=xxCjNiaYCnI

Fri, 06/07/2013 - 15:40 | Link to Comment steve brassey
steve brassey's picture

a pro attacks ideas and not people; this kid needs to grow up; where was the manipulation from 98-2010? so sick of kwn perma bulls, turk, von greyerz and so forth; nothing lasts forever; if you have all your net worth tied up in pm, then that is your choice, so be a big boy and live with your choice! 

Fri, 06/07/2013 - 13:04 | Link to Comment SILVERGEDDON
SILVERGEDDON's picture

There once was a Roubini from Nantucket,

Whose dick was so long he could suck it.

He said with a grin, as he wiped off his chin,

If my ear was a cunt, I would fuck it ! 

Narcicissism.

Fiat Narcissism. 

Fri, 06/07/2013 - 12:34 | Link to Comment Joebloinvestor
Joebloinvestor's picture

A stopped clock is right twice a day.

 

Fri, 06/07/2013 - 16:31 | Link to Comment nope-1004
nope-1004's picture

Roubini said in 2009 that this stock market rally was a "suckers rally".  In hindsight, I believe he was trying to get others to sell so he and his chum can buy on the cheap.

Either way, what he says publicly has been 100% wrong.  He's either a pathological liar, or a complete idiot.  Those traits are not what I'd call admirable or worth following.

Since his disastrous calls about gold and this "suckers rally" in 2009, I've tuned him out.  I've got better things to do than listen to stupid.

 

Fri, 06/07/2013 - 12:22 | Link to Comment Hohum
Hohum's picture

Why if you ignored Roubini and bought gold at $1,500, you'd be rich.  Wait a minute.  You WILL be rich.  That's it.

Fri, 06/07/2013 - 13:13 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

The fully loaded breakeven price of gold for miners is presently $1400 an ounce.  Now consider the following:

1.  Miners need to make at least some profit.  Let's be conservative and say a 5% net margin.  That puts the wholesale price at $1470.

2.  The people the miners sell to need to make profit at the retail level.  Let's again be conservative and say a 5% net margin.  That puts the retail price at $1543.50.

So, if you're buying at any point below $1543.50 retail, you're really buying at a discount to "fair value".  Note that this ignores growing demand/supply imbalances in the physical market, government largesse, currency debasement, and any other consideration that might factor into a person choosing to invest in gold.  You'd actually have to be a complete idiot not to buy physical below that $1543.50 number.   

 

Fri, 06/07/2013 - 11:43 | Link to Comment Barking Spaniel
Barking Spaniel's picture

In the coming years Roubini plans to bend over and double as a gold storage facility.

Fri, 06/07/2013 - 11:41 | Link to Comment q99x2
q99x2's picture

Roubini sold out like most. That is what they are in business to do. Make money. FRAUD is the closest power to SATAN. Those guilty of it are placed in hell close to him.

Fri, 06/07/2013 - 11:20 | Link to Comment lakecity55
lakecity55's picture

TPTB and their media shills are adamant against Au, Ag, and their friends Pt, Pd, and Pb!

Thanks for letting me know that stocking up on said elements is Right On!

Each day they sit silently at the bottom of the lake and testify silently as I smile in contentment.

Keep Stackin, ZH Brothers!

Fri, 06/07/2013 - 10:32 | Link to Comment WTFUD
WTFUD's picture

A STAGGERINGLY BLATANT CONCERTED MANIPULATION OF EPIC PROPORTION ON BEHALF OF ' THE FAMILY '.

WE THE PEOPLE SMELL BLOOD AND ARE COMMITTED TO BRING DOWN YOUR HOUSE OF CARDS YOU PARASITES.

Fri, 06/07/2013 - 10:30 | Link to Comment lunaticfringe
lunaticfringe's picture

"The ego is strong with this one."

Fri, 06/07/2013 - 10:19 | Link to Comment WTFUD
WTFUD's picture

The smell of desperation emanating from all corners of the academic, financial and media outlets in their combined anti gold stance should convince everyone with a modicum of intelligence to plunge the final nail into their coffin and purchase the remaining gold available on the market for sale. In doing so we will unearth the failure of the exchanges and bullion banks to make good on their contracts and thereby default en masse.
Last week i stated soonafter Roubini's treachery on cnbc that not only should this economics teacher be pulled from teaching as his command of spoken english is sadly lacking but he should be hung alongside Soros for his lack of moral integrity. He is one steenking piece of shit.

Fri, 06/07/2013 - 11:36 | Link to Comment lakecity55
lakecity55's picture

I had a dream where Soros was trying to escape Italy with a squad of German soldiers and was caught by Partisans near the frontier. He was disguised as an organ grinder. He had a light-skinned monkey with him who had big ears.

They locked him up then shot him the next day and hung him by his heels in Milan off a lamp post. The monkey escaped.

Oh, wait.......

Fri, 06/07/2013 - 09:41 | Link to Comment Mad Mohel
Mad Mohel's picture

The likes of this "economist" hate gold, because it forces them to be honest. If it took center stage, they couldn't spout off bullshit day and night as they do. The guy can't come out and say, "we are all scumbag liar motherfuckers, and we live to steal from the whole world".

Fri, 06/07/2013 - 09:27 | Link to Comment _Alekhine_
_Alekhine_'s picture

"Unlike other assets, gold does not provide any income."

The reason gold doesn't provide any income is because there is zero probability of default.

Gold is no one's liability.

 

Fri, 06/07/2013 - 13:24 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

Some other stuff that doesn't provide any income:

GOOG

BRK-A

AMZN

GILD

LYG

EBAY

AIG

TEF

FB

RBS

BIIB

ESRX

CELG

GM

LVNTA

SCO

PCLN

BIDU

DTV

ING

VMW

These are companeis with market caps in excess of $30 bln dollars.  No income for investors.  They're merely hoping these common stock symbols rise in USD value.  If these companies go BK, the common stock is worth nothing.  Also, the common stock is typically held by a broker (such as TD, IB, etc.), so if the broker (or the sub-brokers they use, such as Knight Capital, MF Global, etc.) gets in trouble, you're also fucked.  

Good thing we can at least keep our bank deposits safe, even though they generate nearly zero income.  After all, there is a whole $25 bln in FDIC insurance backing $9.6 trillion in deposits.  No risk there whatsoever. 

 

Fri, 06/07/2013 - 15:16 | Link to Comment 11b40
11b40's picture

Shhhhh!

Don't tell everybody!  What's the matter with you?

Fri, 06/07/2013 - 09:25 | Link to Comment markar
markar's picture

Roubini--a barbarous relic

Fri, 06/07/2013 - 10:20 | Link to Comment hootowl
hootowl's picture

Let me help you here,...."Roubini--A stupid, corrupt, barbarous relic."

He should be removed from his position of professorial charlantanism.....but NYU....a large so-called educational institution that is a stupid, corrupt, barbarous cesspool of Rockefellerine/Rothschilderine deception and disinformation.  What a waste and darkening of young human potential.

It can take most of a lifetime to overcome the damage inflicted by such deep and erroneous inculcation.  Send your child to such institutions and he/she will emerge as a menace to society.

You may barely recognize them as the same child that left your home.

STARVE THE BEAST!!!

Fri, 06/07/2013 - 09:25 | Link to Comment IamtheREALmario
IamtheREALmario's picture

Since gold price is determined by London/Wall Street policy and not by the free market any price for gold is possible, including $0... as well as $10,000/oz.

The question to ask is: "What would the price of gold be in a free market and without the aid of speculators?"

Better yet, "What would the price of gold be if there was no fiat money?" How much food, tin or steel could you buy with an ounce of gold?

Fri, 06/07/2013 - 09:56 | Link to Comment 11b40
11b40's picture

The probable answer to your question would be that you could buy more of whatever the object with gold than anything else if there were no fiat currency.

Fri, 06/07/2013 - 14:13 | Link to Comment Thisson
Thisson's picture

The purchasing power of money (gold) decreases in proportion to the acceptance of its substitutes (credit, FIATs).  This is why gold does well in deflation - during deflation credit is destroyed via defaults, making the money remaining in the system more valuable.  It's the reverse of printing money - gold gets anti-diluted when credit is destroyed.

Fri, 06/07/2013 - 11:29 | Link to Comment lakecity55
lakecity55's picture

Ah....a spawn of the Red Shield Clan.

Fri, 06/07/2013 - 08:55 | Link to Comment Stuck on Zero
Stuck on Zero's picture

Is it true that economists have no intrinsic value?

 

 

Fri, 06/07/2013 - 16:42 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

It is true,

Thats why they are called e:CONoMYTHS.

Fri, 06/07/2013 - 09:00 | Link to Comment Bearwagon
Bearwagon's picture

Of course. It's the first deduction of the fact that economics have no intrinsic value!

Fri, 06/07/2013 - 08:20 | Link to Comment Son of Loki
Son of Loki's picture

Roubini was bashing gold when it was $800/oz and saying "it will never go higher."

He also said stocks would never recover.

His predictions have been pretty far off.

Fri, 06/07/2013 - 09:23 | Link to Comment Volaille de Bresse
Volaille de Bresse's picture

Too bad for Nouriel  : the Chinese and the Indians don't give a single shit about what he says/writes or even thinks...

 

Chinese + Indians = 2 billion people ready to buttfuck Roubini. Buy some Depends Nour...

Fri, 06/07/2013 - 08:09 | Link to Comment therover
therover's picture

It always cracks me up when these guys use the 'gold has no income' argument, yet they will praise the virtues of house 'equity' and rising home prices as a good thing....yet homes (not talking investment properties) do not produce any income and are actually a liability, but these guys spew out the garbage that a house is an 'asset'. 

How many small cap stocks produce income, yet these guys pitch them every chance they get ?

At this time, I think physical gold/silver and mining stocks are the perfect contrarian play and a solid long term play. 

 

 

Fri, 06/07/2013 - 14:18 | Link to Comment Thisson
Thisson's picture

#1) Cash also has no yield.  Is he going to bash cash?

#2) Gold actually does have a yield, like any other financial asset!  You can sell options on it and collect income in proportion to the risk you are willing to onboard in exchange.  So, for example, you could sell call options on paper gold (GLD) or you can sell call options on Comex futures.  With the proceeds, you can buy more physical - win/win!

Fri, 06/07/2013 - 08:05 | Link to Comment cloudybrain
cloudybrain's picture

i like his statement, its simple, do the opposite what he talking about, and you will be rich, analyze nothing

Fri, 06/07/2013 - 08:00 | Link to Comment thurstjo63
thurstjo63's picture

Good luck to the fools who pay him to provide economic and financial advice.

Fri, 06/07/2013 - 07:55 | Link to Comment Peter Pan
Peter Pan's picture

Roubini is the fool that recommended Spam over gold.

Gundlach is the smart ass who recommnded rubies over gold because it's too heavy.

Jon Nadler formerly of Kitco could never get his price predictions right.

Greenspan sold his soul and his convictions about gold to become Fed Chairman

The list goes on and on......and so I ask you, how many more fools must we suffer before the world recognises the historical birthright ofgold to be recognized as money?

Every trick in and outside the book has been used to prod the markets higher and the only result is greater uncertainty, more lies, more damage.

We seem to recognise universal measures when it comes to weights and measures yet when it comes to money the alchemists are alive as ever.

Fri, 06/07/2013 - 09:12 | Link to Comment RockyRacoon
RockyRacoon's picture

When they have been bought with fiat currency, why would they say anything that would reduce their stake-hold?

It is their job to shine a light on any conceivable crack in the gold story, embellish or outright lie about same, and spread the word.

Fri, 06/07/2013 - 07:39 | Link to Comment Azannoth
Azannoth's picture

The only "money" to be made in Gold is from the miss-pricing of it relative to fiat currencies, otherwise Gold is Gold 1oz of it today will be 1oz of it in 1000 years.

So is there "money" to be made in gold ?

The Answer to this question is the same as the answer to "is there real supply-demand price discovery in physical gold?"

and we all know that one, don't we

 

Unfortunately for those "gains" to be realized the current monetary/political system must collapse - prepare accordingly!

Fri, 06/07/2013 - 09:13 | Link to Comment Vendetta
Vendetta's picture

I want to know what the true value of an ounce of gold to a barrel of oil is.  I have done my calculations with annual production rates of the two commodities, with and without various fudge factors for 'other' economic activity, but the numbers are so outlandish....

Fri, 06/07/2013 - 09:16 | Link to Comment Bearwagon
Bearwagon's picture

Just ask the Iraqs oil market. They'll take your gold ...

Fri, 06/07/2013 - 08:45 | Link to Comment Bindar Dundat
Bindar Dundat's picture

In 1902 an ounce of gold could rent you a two bedrooom apartment. Today ( except in NY ) it still can.

Gold is a "store of value" and to measure it's value in fiat currency is another mistake made to often by those who think short term.  

I keep enough gold around to live five years in a nice two bedroom apartment and eat well during those sixty months.  If the system has not self corrected in five years , then we will need bullets, not gold.  I keep them somewhere else.

Fri, 06/07/2013 - 09:15 | Link to Comment Vendetta
Vendetta's picture

the common analogy used a few years back was about an ounce buys one a fine toga back in Rome in the day.... sadly I now have several fine toga's that I can't wear anywear :)

Fri, 06/07/2013 - 09:14 | Link to Comment joak
joak's picture

I made the same exercise with the first Golf GTI, launched in the seventies, and the price of a baguette. First Golf GTI price was 4918 EUR, which equalled 44.28 ounces of gold. Today, a Golf GTI costs 31 890 EUR, so 29,53 ounces of gold. A baguette was sold 0.15 EUR in 75, at that time an ounce of gold could buy 778.13 baguettes. Today, one ounce buys you around 1080 baguettes. It means that we had an inflation of 600 %, and that gold did better than keeping its purchasing power (at least for those 2 examples). Plus it has been done few days ago, with gold heavily undervalued. 

Full article for French speaking readers : http://or-argent.eu/quand-golf-gti-baguette-expliquent-pourquoi-acheter-or/

Fri, 06/07/2013 - 14:21 | Link to Comment Thisson
Thisson's picture

That could be attributable solely to increasing productivity.  If you want to isolate the effects of inflation you'd need to figure out how much credit expanded during that time frame.  Still, nice to think about!

Fri, 06/07/2013 - 09:09 | Link to Comment Azannoth
Azannoth's picture

That sounds like a plan +1

Fri, 06/07/2013 - 07:33 | Link to Comment No Euros please...
No Euros please we're British's picture

I hear Roubini has been invited on a lecture tour of China. They love a good comedian.

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