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Has Gold's 'Bubble' Burst Or Is This A Golden Buying Opportunity?

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Introduction

 
With the end of the second quarter it is important to take stock and review how various assets have performed in the first half of 2013 and assess the outlook for the rest of 2013 and, more importantly,  the coming years.

 

Global stock, bond, commodity and precious metal markets have been highly volatile since Federal Reserve Chairman Ben Bernanke again suggested that the Fed would soon cut the pace of its highly unorthodox money printing and bond buying.

Gold and particularly silver had a torrid quarter and have significantly underperformed the vast majority of equity and bond markets in the quarter and in the last six months.


Gold in USD, GBP, EUR and JPY in 1H, 2013

Markets were volatile prior to Bernanke’s “jawboning”, particularly after the Bank of Japan said it would boost the monetary base by ¥60 trillion to ¥70 trillion ($600 billion or $700 billion) annually. This led to record gold prices in Japanese yen in April prior to a series of mini Nikkei crashes and gold falling sharply in all currencies. 

Review of Asset Performance H1, 2013

Precious Metals
Gold prices fell 23% for the quarter, their largest quarterly fall since gold began trading in 1971. The 27% fall this year is the worst first-half performance since 1981.

Silver slumped 31% in the second quarter and was down 36% in the first half.


Gold in USD, GBP, EUR, MSCI Word Stock Index, CRB Commodities Index & US 10 Year Yield

Platinum tumbled 16% in the second quarter and is down 12% year to date.

Palladium fell 15% in the second quarter and is down 3.6% year to date.

Equities
The global benchmark MSCI World Equity Index was down 1.2% in the second quarter but remains up 7% year to date after strong gains in the first quarter due to cheap money and hopes of a continuing global economic recovery.


MSCI WORLD – 1 Year

Wall Street's three major indices finished the quarter with slight gains, with the Dow up 2.3%, the S&P 500 up 2.36% and the Nasdaq up 4.1%. 

The DJIA is just 3.2% below its record high set May 28 and up 13.8% in 2013. That is the best first-half performance for any year since the technology-stock-driven bull market of 1999 which was followed by the stock market crash of the early 2000s.

The Standard & Poor's 500-stock index rose 2.4% in the quarter and posted a first-half gain of 12.6%, the best since 1998. The Russell 2000 Index, which tracks small-company stocks often seen as closely tied to the U.S. economy, rose 2.7%. 

Concerns about China and other emerging markets and geopolitical unrest saw that MSCI's broadest index of Asia-Pacific shares outside Japan down 7% for the year. 

The MSCI Emerging Market stock index dropped 9.1%.

Bonds
Bloodletting was not confined to the precious metals markets and there was considerable bloodletting in the bond market, as the yield on the U.S. Treasury 10-year note rose to 2.49% on Friday, from 1.84% on April 1 and from 1.63% on May 2, a low for the quarter. 

Treasuries through the iShares Barclays 20-year-plus ETF fell 8.9% in the last three months, its worst performance over the last 10 quarters.  The Barclays investment grade corporate-bond index fell 3.3%.


US Generic Govt 10 Year Yield – 1 Year 

Also hit hard were emerging-market bonds, where investors were caught flat footed, not just by worries about the Fed but also by concerns about China's economy and political unrest in Brazil, Turkey and in the Middle East.

Commodities
Commodities saw weakness in general with copper, corn and coffee all having deep declines in the quarter due to concerns about global economic growth. 

The Standard & Poor’s GSCI Spot Index of 24 commodities fell 6.7% last quarter, the most in a year.


Thomson Reuters/ Jefferies CRB Commodities Index – 1 Year

NYMEX oil had a monthly gain of 4.7% in June but still had a second-quarter fall of around 1%. Yet, it remains up 5.75% year to date.

Brent crude oil sank 7.1% since March for a third quarterly decline, the longest streak in 15 years and is down 7.4% year to date.

Natural gas prices declined 11% this quarter but remain up 7% this year.

Copper, near its lowest price in three years, lost 10.3% in the quarter and 15% in the second half.

Copper was depressed by concerns over slower growth in top consumer China and saw its third quarterly decline in a row.

Year to date corn, wheat, coffee and sugar are down 22%, 15%, 16% and 13% respectively.

Soybeans have eked out a 2% gain and cotton is 14% higher year to date.

Currencies
Part of the reason for weakness in commodities was the strength of the dollar which is the strongest currency in the world year to date.


Currency Performance in GBP (Year to Date)

The euro, Danish krone, Swiss franc and Swedish krona have also displayed strength so far in 2013.


Currency Performance in Euros (Year to Date)

The weakest currencies have been the precious metals, the Japanese yen, the Australian dollar and the Norwegian krone. 

Outlook For 2013 and Rest of Decade
The volatility of recent weeks is but a mere small taste of the volatility in store for all markets in the coming months and years. The global debt crisis is likely to continue for the rest of the decade as politicians and central bankers have merely delayed the day of reckoning. They have ensured that when the day of reckoning comes it will be even more painful and costly then it would have been previously.

Macroeconomic, Systemic, Geopolitical and Monetary Risks
Despite a degree of irrational exuberance and complacency in markets in recent months, some of which have contributed to the fall in gold and silver prices, there remain significant risks. 

>> Macroeconomic
The global economic recovery remains very tentative. China, Japan, the U.S., the UK, most European countries and all major economies face major challenges and there is a real risk of double dip recessions and a global recession.

>> Systemic
Many western banks and sovereign nations are bordering on insolvency and remain very vulnerable.

Contagion remains the real concern and there is a real risk that periphery economies are canaries in the coalmines and herald coming problems for larger industrial nations such as Japan, China, the UK and the U.S.

 Should this happen long term interest rates would likely rise from the unsustainable record low levels seen today.

>> Geopolitical
Geopolitical risk from terrorism and war remains high and there are many geopolitical hot spots in the world especially in the Middle East - in Syria and between Iran and Israel. Tensions between Iran and Israel and the U.S. could lead to a military incident that degenerates into a regional conflict in the Middle East.

Other potential flashpoints are in Afghanistan, Pakistan, the Koreas and increasing tensions between the U.S. and China and the U.S. and Russia.

While there is little risk of a direct military confrontation between the U.S. and emerging superpower China, there is a risk of war being waged through proxies and of economic war involving economic protectionism and currency wars.

>> Monetary 
The initial skirmishes of the ‘global currency wars' have been seen in recent years. 

These currency wars involve competitive currency devaluation and currency debasement as governments and central banks internationally devalue their currencies in order to maintain job sustaining, export growth and maintain fragile economic recoveries.

We are experiencing a mere lull in currency wars but expect them to return with a vengeance when economic growth falters.

Bail-Ins, Sovereign Debt and Currency Devaluations
There will be banking and sovereign casualties in the coming years with obvious ramifications for those seeking to protect and grow wealth.  Thus, it has never been more important for investors and savers internationally to have diversified portfolios. 

Lack of diversification and being overweight equities and property and the use of leverage and speculation led to much wealth destruction in recent years.

Today, many investors and savers are overweight cash deposits and long term government bonds and are thus being recklessly conservative. This is despite the real risk of further sharp losses in government bond markets and the real and underappreciated risk of “bail-ins”.

With bail-ins set to become policy in the western world, retail and corporate depositors need to be extra selective and vigilant. Owning physical gold outside the banking system becomes even more important so as to protect from deposit or asset confiscation. 

It is important to acknowledge the risks posed to the European Monetary Union due to a potential sovereign default still remain. Greece, Italy, Spain, Ireland and even France all remain vulnerable and the Eurozone debt crisis could rear its ugly head at any stage in the coming months.

Despite Fed talk that they may ‘taper’ and reduce QE, loose monetary policies internationally are set to continue which will support the precious metals in the long term.

New Bank of England governor, Mark Carney is likely to be a dovish inflationist who may debase sterling, making gold important for people in the UK looking to preserve their wealth.   

Sterling is already down 5% and 7% against the dollar and euro so far in 2013 and we expect further weakness in sterling in the coming months.

Conclusion 
The short term outlook for the precious metals is, as ever, uncertain. Further weakness is possible although there is strong support for gold at the $1,200/oz level from a technical and fundamental perspective.  There is robust international demand for gold at these levels and gold is becoming increasingly uneconomical to mine at these depressed price levels.

Pound, euro and dollar cost averaging into a physical gold position protects from volatility and from short term price risk and remains prudent.

Longer term we continue to believe that gold is in a secular bull market which will continue from 2015 to 2020. We continue to believe that gold should reach and surpass its inflation adjusted high of $2,400/oz in the coming years.


Support & Resistance Chart – (GoldCore) 

Given the variety of macroeconomic, systemic, geopolitical and monetary risks in the world today, owning an internationally diversified portfolio with healthy allocations to gold and silver bullion has never been more prudent.

 

For more on this topic please join GoldCore today for a FREE webinar:

"Has Gold's 'Bubble' Burst Or Is This Another Buying Opportunity?" 

 


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Tue, 07/02/2013 - 16:23 | Link to Comment disabledvet
disabledvet's picture

again "there is no such thing as a bubble in gold." as they say in retail "the price is the price." move along...

Tue, 07/02/2013 - 15:21 | Link to Comment CowboyzFan
CowboyzFan's picture

pebblewriter said 1155 is the magic number:  http://pebblewriter.com/update-on-gold-june-26-2013/

Tue, 07/02/2013 - 15:01 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

I loved when CNBC had the guy from "Pawn Stars" on telling everyone how them Central Bankers'll screw ya. 

A pawnbroker telling people how OTHER GUYS will screw them.

Ya better run to his shop and buy gold at a big premium over spot, because everyone knows pawnbrokers are honest. 

Tue, 07/02/2013 - 14:33 | Link to Comment SqueekyFromm
SqueekyFromm's picture

Well, I just had a breakthrough on another thread here, and the Gold Bugs may have been exposed to a self-destructive virus!!! Those of us who are still rational must spread the word! Call the CDC or something. Presenting my latest Irish Poem!!!

STAXnut

There once were some NSA hacks

Who created a virus called STAX!

It caused folks to schiz,

And to buy Gold in fits,

In complete disregard of the facts!

 

Squeeky Fromm, Girl Reporter

Tue, 07/02/2013 - 18:45 | Link to Comment LoneCapitalist
LoneCapitalist's picture

Dont quit your day job. Im sure McDonalds would miss you.

Tue, 07/02/2013 - 18:47 | Link to Comment Bendromeda Strain
Bendromeda Strain's picture

Denninger has a fluffer... who knew?

Tue, 07/02/2013 - 14:28 | Link to Comment arcos
arcos's picture

Buying opportunity: the price of crude oil keeps rising.

Bubble bursting: if we find 3 new Saudi Arabias in the not too distant future.

Tue, 07/02/2013 - 13:05 | Link to Comment Al Huxley
Al Huxley's picture

Gold's going to get fucked to death by paper traders and manipulators at the bullion banks until the GLD and Comex vaults are completely empty AND somebody complains about being settled in cash.  Until then they can apparently do what they want.  JP Morgan went into the close of June APPARENTLY 80,000 oz short of their required delivery commitments for the month, and yet, nothing, no updates to inventories, no news of default, just - new normal, JPM is now short of their commited deliveries, Comex rules are irrelevant, go about your business.

 

Similarly, gold tanks last week for 3 days, and GLD inventory is COMPLETELY flat.  Then yesterday they lose a lousy 1.3 tons.  There's no way those reported inventories reflect what actually happened over the course of last week.  So net take-away - ALL numbers published about gold are complete and utter bullshit, and the market is 100% fictitious and in the hands of the bullion banks and central banks.  So yes, by all means, its a good idea to buy gold, because one day this whole financial ponzi will collapse and then gold will be the place to be.  But don't expect any help from the 'markets' in terms of providing hints on when that might be.  You might as well gut a chicken and try reading the entrails.

Tue, 07/02/2013 - 17:48 | Link to Comment fijisailor
fijisailor's picture

The more desparate they get, the more lies are told

Tue, 07/02/2013 - 18:49 | Link to Comment Bendromeda Strain
Bendromeda Strain's picture

They can't keep pukin' up that metal forever - "that which is unsustainable... yada yada"

Tue, 07/02/2013 - 13:00 | Link to Comment Meremortal
Meremortal's picture

In the end the conclusion must always be the same.

No matter the conditions or the price, buy, buy, buy.

Reminds me of the real estate mantra, "it always goes up".

Or the stockbroker mantra, "over any 10 year period, stocks have always gone up".

Whoops.

There are no fundamentals anymore, we live in a world of speculation and distortion. Gold is not immune. Welcome to the casino, where the show never ends. Small markets are the easiest to distort, and gold is a tiny market. Hell, a few billionaires could try with gold what the Hunt Brothers almost pulled off with silver in the early 80's. And it might work.

The secret to gold is to be a dealer. They don't care what the market is doing, dealers are the House and the House always wins. That's why they are happily selling to anyone wanting to buy.

Why are gold dealers selling that which can only go up over time?

 

 

 

 

 

 

 

 

 

 

 

Tue, 07/02/2013 - 15:57 | Link to Comment FrankDrakman
FrankDrakman's picture

Why are gold dealers selling that which can only go up over time?

Because, unlike you, they are not idiots. I worked for a gold dealer; even though they had 8 traders simultaneously buying and selling, they always kept a handle on their net position, and when ever it exceeded 2,000 ounces, they would buy or sell a forward contract to hedge themselves. This often meant, on busy days, buying and selling forward contracts within minutes of each other. They make their money on their buy/sell spread, and their desire is for volume. They keep their position neutral because THEY ARE NOT SPECULATORS. Although individual traders may hold amounts in their private accounts - and most do - they are not going to speculate on the company's future by buying and selling gold for a corporate account. Even though they may be right in the long term that gold is going to go up, as Keynes once noted, markets can remain irrational longer than you or I can remain solvent. A long and sustained fall in the price of gold, such as we've seen this year, could bankrupt them. A $200 fall in the price of gold on 1,000 100-oz bars - enough to fill a small filing cabinet - is a $20 million loss, which is much more than these small firms could absorb.

Tue, 07/02/2013 - 10:12 | Link to Comment Smiddywesson
Smiddywesson's picture

"Outlook For 2013 and Rest of Decade
The volatility of recent weeks is but a mere small taste of the volatility in store for all markets in the coming months and years. The global debt crisis is likely to continue for the rest of the decade as politicians and central bankers have merely delayed the day of reckoning. They have ensured that when the day of reckoning comes it will be even more painful and costly then it would have been previously."

Good point.  Reality doesn't count in this environment, until it does.  Until then, gold will remain the punching bag of these manipulated "markets."  Anybody stacking is just going to have to bear the pain of seeing their paper value fluctuate.  The real question is what happens when the music stops?  We know a few things for sure, and can guess a few from logic:

1.  The system rests upon a cooperative effort to control gold so that paper is accepted, because paper can be COMPLETELY manipulated and gold can only be partially manipulated through hugh cooperative efforts.  Therefore, gold cannot be suppressed below a certain threshold level without the self interests of the conspirators changing and the conspiracy falling apart.

2.  At some point the system will collapse.  Anyone without physical assets at this point will lose everything.  People with assets other than gold or silver will have to partially liquidate them at discount prices to maintain their standard of living.

3.  When the system collapses, the people who benefit from a paper system will attempt to substitiute another paper system and continue to hold down the traded price of gold, or even outlaw it.  Ruthless people with power are not going to accept a gold standard.  You can forget about that. 

4.  In the past, this usually failed because people didn't want paper, but in the past, you didn't have EVERY country in the same boat and you didn't have a dumbed down population accustomed to paper.

Outlook:  The best case scenario is everything breaks and gold is used to back the monetary system, rising to its true valuation.  This is about as likely as the NSA erasing all that private information they are collecting and issuing an appology to everyone.  The worst case scenario is the holders of physical lose less than everyone else, but they don't get the prize, an honest valuation of gold based on auction markets operating without manipulation.  Unfortunately, I see this result as the most likely, which is still justification enough to stack in my opinion.  Either scenario involves stackers sitting through continued attacks and panic filled news reports.  Whether the paper price goes down from here or not, you are just not living in an environment where the powers that be will allow a steady trend to demonstrate the truth of what is going on in the world.

Tue, 07/02/2013 - 09:49 | Link to Comment rational
rational's picture

I love how gold bugs try to pretend the volatility of other asset classes is somehow comparable.

Tue, 07/02/2013 - 09:27 | Link to Comment Donewidit
Donewidit's picture
Ecclesiastes 1:9 What has been will be again,

    what has been done will be done again;
    there is nothing new under the sun.

Tue, 07/02/2013 - 09:21 | Link to Comment red_pill
red_pill's picture

Here is an article laying out the case of the true cost to mine Silver, based on the primary silver producers is close to 23/OZ

Aslo makes a good argument that decling EROI is and will be the downfall of any civilization, and that gold and silver are not only assets with no counter-party risk, they are assets with zero energy debt, in other words once sold, they have no energy debt, unlike paper gold and other investments, which have a future energy debt.

http://srsroccoreport.com/the-primary-miners-the-fed-18-silver/the-primary-miners-the-fed-18-silver/

Here is a snippet

The Collapse of the Roman Empire and the Falling EROI

There has been a great deal of debate on the reasons why the Roman Empire collapsed.  Some say it was due to the decline in morals, while others say it was due to either the debasement of the currency, high taxation, corruption, expensive wars, decay of infrastructure,  and so on and so forth.

However, the real reason the Roman Empire collapsed was due to the falling EROI of their civilization. 

The EROI can be simply explained by how much energy is returned by the energy invested.  Some like to use the abbreviation of EROEI, but I find the less letters the better.  Even some of the top minds who research this subject use EROI to describe it.

The rule of thumb is this… the higher the EROI ratio the more energy profits which may translate into a higher percentage of financial profits and gains.  Individuals need to realize ENERGY DRIVES THE WORLD MARKETS… NOT FINANCE.  Finance only steers the markets.  And as I have stated before, finance is presently steering the world over the cliff.

Let me give an hypothetical example of the EROI at work.  Let’s assume a family owns a business and is doing so at an EROI of 3/1.  For each unit of energy they use or consume, they have 2 units of energy left over as a profit…. not 3 as one unit represents the energy consumed.  A break-even EROI would of course be a 1/1 ratio.

They take these 2 energy units which are converted to money by the market to maintain their household and have 1 unit left over to put into a local bank as savings.  I realize some of you may not agree with this theory, but just follow along for a  time being.  Furthermore, if we were to assume that the other families in the town averaged about the same 3/1 EROI and deposited their 1 unit of energy profit as money in the bank, there would be a great deal of money (energy profits) deposited over a period of a year.

Let’s also assume this money was in the form of gold or silver.  Just think about all the work and energy by all the families that went into producing that 1 daily unit of energy profit that has accumulated in the bank.

Now, one day two strangers ride into this town (circa 1800?s) with a few firearms.  They go to the local saloon, grab a bite and a few shots of whiskey and then head over to the local bank.  There, they calmly walk in and hold up the bank and ask for the all the gold and silver in the bank vault.  After a few minutes work, they leave the town with a great deal of money.

If we think about the EROI of the bank robbers it could be something like 10,000+/1.  If you add up the energy (money) they invested in their lunch and whiskey, plus all the energy they expended in riding to the town, robbing the bank and their grand escape, you will find out it was a fraction of a fraction compared to all the energy units that were now stored in those gold and silver coins resting in their saddle bags.

I realize this simple example may  stir up some debate, but this very same method was in fact the very same business model practiced by the early rulers of the Roman Empire.

In the beginning stages of the Roman Empire, it took very little in the way of energy costs to raise, train and use the Roman Legions to win the battles to acquire more lands.  These lands contained great energy wealth stored in either stolen riches, mines, agricultural lands, timber and human labor.

Here we can see that the EROI of using armed forces to acquire riches, wealth and lands by the Roman Emperors was quite similar to the two robbers stealing the gold and silver from the local bank.  Sure, there was more energy consumed and more elaborate in the Roman Empire’s example, but relatively it is the same method.

Most of the lands the Roman Empire conquered in the early stages were no match for the well trained Roman Legions.  However, as the Roman Empire grew, so did the energy costs to maintain its infrastructure, forts, and legions from invading forces.

Towards the end of the Roman Empire, the Emperors found themselves in a dilemma.  They had the forces to conquer the Northern Germanic Tribes, but there was very little in the way of  wealth.  On-the-other-hand, the Persians in the south had a great deal of stored energy wealth for the taking, but the cost was too great.  In both examples, the Energy Returned On Invested (EROI) was too low to maintain the Roman Empire’s bloated system.

So, as the Roman Empire stagnated under the weight of increased energy costs to maintain their huge lands, legions and its society, the EROI ratio declined to point where the Emperors had to resort to debasing their currency to maintain the illusion of prosperity.

The days of high EROI were now over for the Roman Empire.  As societies become more complex, the EROI of the system declines.  Typically, the rulers will try to fight the negative forces of a declining EROI by raising taxes, debasing the currency or other desperate measures.  However, it always fails in the end.

Now, that we have a basic understanding of the EROI and its impact on complex societies, why is the EROI a SECRET WEAPON for the precious metal investor?

THE FED:  The Violator of the EROI

Due to the Fed and Central Bank market rigging, the precious metal paper prices have fallen into the toilet.  The forecasts of $1,000 gold by the MSM hacks doesn’t seem so ridiculous now that the price of the yellow metal is only $100 from that level.

Well, let me say this… they may be able to postpone the collapse of fiat based financial system money due to a falling EROI, but they will never be able to stop it.  The FED and the majority of the fiat monetary mouthpieces have no clue on how energy or the falling EROI relates to the economy.

As I mentioned before, the world is driven by energy.  Energy is the basis of our monetary system, whether you want to believe it or not.  The majority of the people in the world’s economies have to abide by the RULES of the EROI.  They work very hard to produce a small degree of energy profits in which they exchange for fiat monetary notes.

As the world’s economies become more complex, the EROI ratio declines.  So the governments resort to increasing taxes, printing money  and waging wars to obtain high EROI energy sources from foreign countries.

This is how the FED and Central Banks violate the EROI.  Today, we are at the last stages of this CHARADE as the FED and Central Banks realize that printing money no longer provides enough bang for the buck.  So, they now have to purchase their own Treasuries, Bonds and other more worthless paper financial instruments such as Mortgage Backed Securities.

As the FED purchases $85 billion a month of U.S. Treasuries and MBS, it adds another $85 billion worth of ENERGY IOU’s rather than real assets to its balance sheet.  We must remember everything is based on energy.  Thus, ENERGY = MONEY

A long dated treasury or MBS is nothing more than debt instrument only settled in the future by the economic growth based on the burning of energy.  The FED is basically trying to postpone the falling EROI of our economic system by propping up the present economy by adding massive amounts of energy debts to its balance sheet –the same is also true for the U.S. Govt.

Thus, the FED has debased the value of the energy profits by way of fiat money.  The public does not realize the loss of value because they have been indoctrinated to believe that fiat money is real money.

Why Gold & Silver Are Real Money

Gold and Silver represent real money because they are stores of what I call ‘TRADE-ABLE ENERGY VALUE”.  Each coin of gold and silver contain a certain amount of stored energy value… which is paid in full.

Most precious metal analysts who say gold and silver are true stores of wealth, believe so because they don’t offer any “counter-party risk.”   I agree, but I would like to add the following footnote.  Gold and Silver don’t have counter-party risk because they are don’t have  any ENERGY DEBTS attached to them.

The problem with most paper assets including gold and silver futures options and other derivatives is that their values are derived in fiat monetary system.  Fiat money is based upon the debt of the respective governments via their treasury and bond markets.  Again, treasuries and bonds are not assets… they are energy iou’s.  The tremendous growth of the world’s bond markets is just another way of disguising the falling EROI of the world’s economies.

This recent take-down in the paper price of gold and silver is an attempt by the fiat monetary authorities to COVER-UP the true barometers of stored energy value.  We must remember, just as the Roman Emperors debased their currency to try and offset the declining EROI forces, the Fed and Central Banks are presently continuing this same folly."

"

Tue, 07/02/2013 - 08:09 | Link to Comment Quinvarius
Quinvarius's picture

Gold is absolutely the cheapest it has ever been right now thanks to this raid.  Look at this chart.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/1_Stunning_Gold_%26_Silver_Charts_Reveal_Shocking_Global_Situation_files/KWN%20Pomboy%20V%207%3A1.jpg

 You are getting the same deal as in the year 2000, at the height of the stock bubble and the Brown Bottom, after the 20 years of manipulation leading into it.  Gold would have to be 13x higher to match 1980.

The cycle must complete.

Tue, 07/02/2013 - 10:21 | Link to Comment Smiddywesson
Smiddywesson's picture

This is the first time I ever disagreed with Quinvarius, and it's really not a disagreement as much as a qualification.  Yes, gold is the cheapest its been since 2000, but this isn't 2000, and the stakes are a whole lot higher for the central banks than they were in 2000.  I therefore have to conclude that there are remaining measures they will take in their desperation that have yet to be seen.  If Q is saying it's a great time to stack, I can't disagree, because the end, when it's too late to buy will come without warning.  I would merely caution that we are likely to see still lower prices as the crisis develops, so keep some powder dry. 

Tue, 07/02/2013 - 08:26 | Link to Comment Midasking
Midasking's picture

The media reports on gold sound just the same as they did back at the Brown Bottom.  We are just about to go lower than production costs which was the same at 275 per oz... at the time you couldn't give it away.  This time physical demand is much larger.  Something has to give http://tinyurl.com/pp588mj

Tue, 07/02/2013 - 07:42 | Link to Comment Devotional
Devotional's picture

The debt crisis will never end, it will escalate.The time is now to keep stacking.

Tue, 07/02/2013 - 06:32 | Link to Comment stopcpdotcom
stopcpdotcom's picture

My local coin dealer in the UK is out of sovereigns.

Tue, 07/02/2013 - 10:30 | Link to Comment Smiddywesson
Smiddywesson's picture

This isn't a criticism, but I'd like to point out that these comments about supply have been going on for years and are a distraction.  When it's too late to buy, everywhere, all at once, it will be too late to buy.  That event will be confirmed by a sharp rise in prices.  It will be a global event like a nuclear exchange, and won't be presaged by a lack of supply at a local coin shop.  When supply dries up, the big players will know first and they will shut down first, not the local shops.  That time has not come yet.

Tue, 07/02/2013 - 13:10 | Link to Comment Bay of Pigs
Bay of Pigs's picture

No, but the rapid flow out of GLD (whatever gold they havd backing it), is a clear sign of extreme stress in the physical market. And I assume that gold is heading eastward to places like Shanghai.

NYC and London are going to be smoldering craters when this all goes down. They are fucked beyond repair, buried in their lies, deception and corruption.

Tue, 07/02/2013 - 06:19 | Link to Comment SAT 800
SAT 800's picture

It's a buying opportunity; Silver even more so. check out bullionvault.com for silver and gold at no margin; no premium; it's real; it's in a vault; if you can get by the hillbilly opinion that you need to have it buried in the yard; it's a very good opportunity. They tell you all about it on their website. it's interesting just to look at the daily audit of the Silver Bars that they publish; a lot of people have millions of dollars on deposit there. There hasn't been much selling either. Not nearly enough to correspond to the price drop; but that won't be a surprise to a Zero Hedger. Cheers.

Tue, 07/02/2013 - 13:06 | Link to Comment Son of Loki
Son of Loki's picture

Don't tell MSM but AAPL is down 40%....Oracle 16%....Blackberry down almost 20% in one week...and, oh yeah, most houses in my neighborhood are still underwater 38% and more an dmore are being short-saled and turned intolow-income section 8 rentals.

 

I'm glad it's the "summer of recovery" with a "robust" economy or I would still to worry.Seems like the "yellow metal" is holding up pretty well compared to other options.

Tue, 07/02/2013 - 08:50 | Link to Comment Agstacker
Agstacker's picture

Hillbillys are smart, if you don't hold it, you don't own it.

Tue, 07/02/2013 - 12:23 | Link to Comment Silveramada
Silveramada's picture

gotta have it in your hand in order to have ZERO counterparty risk...MF global anyone?

 

http://zysites.com/silververitas/

check out why premiums are going up soon beside the special internet retailers are promoting temporarely...

Tue, 07/02/2013 - 12:07 | Link to Comment MrSteve
MrSteve's picture

Hillbillys know there is no difference between your gold being confiscated, demonetized, nationalized (FDR's approach), seized, taxed, federalized, called or called in or called out or being Bernie Madoff'd. No difference.

Hillbillys are so ignorant they don't own, hold, store, manage, control, deposit, assign, possess, declare or state anything about no gold except that once they gave some of Granpa's old coins to charity, with no receipt. Hillbillys are so ignorant they grow some of their own food, make beer and help neighbors with big chores (and little ones) and don't take any folding money for their work. Man, are they ignorant!

Anyone not clear on the concept of ignorant hillbillys who got no gold need to consult the Zen writings on the usefulness of uselessness.

Tue, 07/02/2013 - 10:00 | Link to Comment AllThatGlitters
AllThatGlitters's picture

Did any Hillbilly ever score an 800 on their SAT? That is a true measure of success and smarts. /sarcasm

I bet those that had gold with MF Global wished they had scored only a 300 on their SAT, taken possession and buried it in their back yard like a hillbilly.

 

 

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