"We've Been Conditioned Over The Years To Trust Paper Money"

GoldCore's picture

Today’s AM fix was USD 1,231.75, EUR 911.60 and GBP 760.57 per ounce.
Friday’s AM fix was USD 1,241.75, EUR 918.59 and GBP 766.75 per ounce

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Gold remained unchanged Friday, closing at $1,243.20/oz. Silver slipped $0.12 or 0.6% closing at $19.87/oz. Platinum fell $5.50 or 0.4% to $1,437.74/oz, while palladium dropped $6.50 or 0.9% to $729.72/oz. Gold and silver both fell on the week at 3.46% and 4.24% respectively.

Gold in U.S. Dollars, 1 Day - (Bloomberg)

Gold initially ticked slightly higher in Asia overnight after the U.S., China, Russia, the UK, France and Germany reached an agreement with Iran yesterday to limit Iran’s nuclear programme. The agreement allows for the easing of sanctions on trading gold with Iran. This has prevented Iran from diversifying into gold in recent months.

Two hours into trading and gold was slightly higher at $1,244.50/oz. However, gold prices then came under pressure, with more concentrated, significant sell orders commencing at exactly 0600 GMT. Sharp, concentrated selling took place which pushed gold prices from $1,238/oz to $1,225 or $13 in less than two minutes. Interestingly, a volume buyer then stepped in and gold then bounced higher to $1,233/oz.

The detente with Iran is not as bearish for gold as is thought. While the threat of any imminent conflict with Iran has eased in the short term, the move allows Iran to begin accumulating gold again - another source of significant sovereign demand.

There is also still risks of a military confrontation in the region. Israel and Saudi Arabia were extremely opposed to the deal and significant tensions remain in the powder keg that is the Middle East.

On Friday, gold managed to close with a slight gain, but that didn’t stop prices from suffering their biggest weekly loss in 10 weeks - down 3.4%. Gold’s falls came amid peculiar trading on the COMEX last week which saw COMEX suspend trading twice on Wednesday. The incessant speculative chatter over possible, but unlikely, tapering of the Federal Reserve’s debt monetisation programme continues.

DEMAND IN CHINA remains robust as seen in Shanghai gold premiums. Closing wholesale premiums continue to strengthen, gold closed at a $33 premium at $1,265.69 (see table below) today, up from a $11.25 premium at $1,265.69/oz on Friday.

Gold Prices / Fixes / Rates / Vols - (Bloomberg)

The Shanghai Gold Exchange saw ‘recorded deliveries’ of 17.950 tonnes bringing November totals to 216.018 tonnes. Gold deliveries on the SGE are headed for another extremely large delivery month once settled as Chinese jewellers and bullion dealers stock up for Chinese New Year.

LATEST CFTC DATA from the U.S. Commodity Futures Trading Commission showed hedge funds got increasingly bearish on gold, with speculators scaling back exposure after the most aggressive pullback in positioning since March 2012 the week prior. Net longs on gold dropped to the lowest level in four months.

COMEX warehouse activity was interesting Friday as physical silver bullion saw very significant movement in COMEX warehouses. 2,554,353 troy ounces were received and 18,335 troy ounces shipped out.  HSBC USA was the large recipient of 1.954 million ounces of silver.

JOHN PAULSON, hedge fund billionaire recently told his clients that he won’t invest any more of his own money in his gold fund, owing to an uncertainty over when inflation will accelerate. Paulson’s PFR Gold Fund is reportedly down 63% year-to-date.

It is important to note that Paulson is not selling his gold and is maintaining his very large position in gold which is a vote of confidence by one of the largest investors in the world.

Gold in U.S. Dollars, 5 Days - (Bloomberg)

GOLDCORE’S MARK O’BYRNE was interviewed by the SGT Report over the weekend and the video has just been released and can be viewed here .

“We have these huge fundamental factors that should be contributing to higher gold (and silver) prices, and that’s why many people are scratching their heads and asking ‘why isn’t this happening?’”

“We’re down about 25% year to date despite these strong fundamentals.”

Mark explains how for 53 years the Chinese people were banned from owning gold. But that all changed in 2003, and now the enormous demand by 1.3 billion Chinese over the last ten years is causing a paradigm shift, as gold and silver moves from the West to the East.

He says how silver remains very undervalued and will likely reach its inflation adjusted high of $140/oz in the coming years.

Silver remains a tiny market with all above ground refined silver in the world at roughly 1 billion ounces for a total valuation of less than $20 billion at today’s prices.

Therefore, all the silver in the world is worth less than the total market capitalisation of one tech darling, Twitter. It is worth less than the  total market capitalisation of Tesla.

All the investment grade silver in the world, is worth roughly what the Federal Reserve prints in one week - $19.6 billion. Incredibly, at $85 billion per month, the Federal Reserve is printing money and buying its own debt to the tune of $19.6 billion a week - “mind boggling”.

As for the race to debase and the manipulation of precious metal prices, Mark says, “They can mess around with the price all they want, ultimately the price of everything in the long term will be dictated by supply and demand, particularly for a physical commodity like gold.”

VIDEO: "China’s Insatiable Demand For GOLD Causing PARADIGM SHIFT"

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SnatchnGrab's picture

At the end of the day the dollar bill is a promise. Nothing more nothing less. However, contrary to popular belief, printing =/= wealth. Furthermore the promise is backed by more of the same promise. Well if the initial promise is worthless what does that say about the subsequent promises?

ebworthen's picture

Ultimately, people have been trained to trust binary digits, 1's and 0's on a banks' computer.

The same is true of I.R.A. and 401K and Pension balances.  People are sent emails or letters that show "X" amount of money.  The money is there, but it isn't really "there".

Ask M.F. Global fund holders, G.M. bond holders, and Detroit Pensioners how much of their money is still "there".

Radical Marijuana's picture

"... ultimately the price of everything in the long term will be dictated by" the ability of human beings to murder each other, which is now much, much cheaper than ever before, as long as those doing the mass murdering are sufficiently insane to not worry about themselves being murdered too, which appears to be more the case now than ever before.

The extreme and growing distortions in human ecology and political economy are due to the historical development of being able to back up frauds with force, so that we now have global electronic fiat money frauds, backed by an abundance of weapons of mass destruction. THAT IS THE CONTEXT IN WHICH, FOR SURE "We've Been Conditioned Over The Years To Trust Paper Money!"

We have been conditioned to adapt to survive within a social system almost totally dominated by legalized lies, backed by legalized violence, which has driven our state religion monetary system, of faith-based money, to be worshiped by most people, despite it being huge lies, backed by nothing else but violence. The whole world is now an insane asylum controlled by the most criminally insane people. In that context, most of the outlook in this article is nostalgic nonsense that things could return to normal, rather than go through such extreme psychotic breakdowns that we are not able to imagine them!

Most of the rest of world was conquered by the Neolithic style of civilization, which passed from the Middle East, through Europe, to be able to spread all the way around to return to where it started. That system of backing up lies with violence was imitated with gusto by those who were temporarily subjected to it, so that they could, as quickly as possible catch up and tend surpass their conquers in manifesting collective insanities.

That is the way that I see what has happened in Asia, and especially in China, after the Western powers humiliated China, the Chinese responded by learning to do what we did, and have ended up doing it now better than we have. Therefore, China has become more like us, only even more insane, in the degree to which they are creating money out of nothing, and using it to buy up assets, like gold.

To believe that that somehow vindicates the value of gold, rather than demonstrates runaway social insanity, misses the point of what is really happening and WHY!  China has doubled down on the basic insanity of the social pyramid system of Neolithic civilization, which it already developed to a high level, in a relatively sustainable way, thousand of years ago. What China has learned from the Western powers that humiliated it is how to become much more insane, in extremely unsustainable ways.

People who think gold is valuable have an obsolete mentality that is not coming to terms with the ways that gold was made by atomic energy, in exploding suns, and that human beings can now do similar things with atomic bombs. The possession of gold is a goofy old-fashioned idea that somehow the ring of truth in the principle of the conservation of matter still counts in a world which has proven the special theory of relativity to be correct, that all matter is super extremely concentrated energy.

Money is measurement backed by murder. The measurement of gold is necessarily backed by murder too. The problem with possessing gold, or anything else, is that claim is backed by coercion, while power to use the force of coercion has become atomic power. In that context, gold bugs are old-fashioned goof balls, which operate with deliberate ignorance towards the ways that the private ownership of anything, including gold, depends upon backing up claims with coercion, while the coercion to back up those claims now includes atomic power.

Since the first generation ever to grow up with that fact is still alive today, and they have learned nothing, but rather, have "Been Conditioned Over The Years To Trust Paper Money," as the state religion based on the force of governments to back up frauds, which was always absurd nonsense, I can sympathize with those who would like to believe that returning to commodity based money would somehow result in returning to a sounder honest money. HOWEVER, SINCE MONEY IS ACTUALLY MEASUREMENT BACKED BY MURDER, HAVING AN HONEST MONEY SYSTEM WOULD REQUIRE HAVING A HONEST MURDER SYSTEM TO BACK THAT UP! GIVEN THAT THE MURDER SYSTEMS ARE NOW BASED ON HAVING WEAPONS OF MASS DESTRUCTION, WHICH COULD BECOME SUICIDAL TO ACTUALLY USE, THE HUMAN SPECIES HAS BECOME A GROUP OF INSANE RIDERS ON AN UNTESTED ROLLER COASTER, PLAYING RUSSIAN ROULETTE TO PASS THE TIME ...

The Wisp's picture

Gold makes great Christmas gifts.. a 1/10 oz is a great idea because  if they knock off one zero they will always know what it's worth, and they get to watch the market, and who knows you may create a few Gold Bugs while you are at it..

drstrangelove73's picture

Been buying gold for roughly 30 years;at $800,at $370,at $1400.
I was told 5-10% of net worth in the early 80's.Own a little silver too.
From Hippocrites:
"Life is short,
The art is long,
Decision(diagnosis) difficult,
Experience deceptive..."

steveo77's picture
I wrote up an extensive article on Radiation reaching Hawaii through the water. A lot of connect the dots stories, using news sources in Hawaii.

For a number of reasons I recently left Hawaii. But the reality of Hawaii is that if you are not getting enough ocean sports in, you are paying too much for "paradise". Swimming in Strontium is not my idea of enjoyment.

Large Mass of Possibly Radioactive Flotsam Spotted in Hawaii, aka We Killed the Pacific


SAT 800's picture

I kind of like the fact that it's seventy degrees today; and I have parakeets for my wild bird population outside the window, as well as doves, which make lovely noises. If you get hungry you can always shoot a turkey or a pig or a goat; there;s thousands of them running wild. but I'm lazy so I buy my hens eggs and oatmeal at the store. Gasolene is expensive; but everywhere is a lot like everywhere else; so where do I want to go? I already live in the prettiest place around. I only go to town once a month, and really the gas. price doesn't even register. But it's a retirement community; you certainly don't want to try to make a living here; unless you're a commodities speculator ! The internet usually works all right.

lasvegaspersona's picture

It is true that we have had a relatively stable dollar ( I said relatively). Much of the world has had horribly flimsy money though and THEY know better than to hold paper for too long...Argentina anyone?

SAT 800's picture

A year is nothing in the precious metals markets. If you look back at 2000-2001; you'll see Silver made a double bottom at $4.35/oz. on a daily basis; in 2001, one year after it made the first bottom at that price in 2000. This, of course, was the starting point of the present secular bull market in the metals; but what did it look like at the time? It looked like a disaster. It was hopeless; it was obvious Silver was "never" going to rally. "Never" is a long time; hedge accordingly. I had the interesting experience of trying to get middle aged American Adults who were already in capital markets; like the stock market; to buy silver at those prices; I was told to go away and stop bothering them; I was obviously crazy, etc, etc. Human beings are wired up to believe that tomorrow will be a lot like yesterday; the ability to use knowledge gained from study and history and correct interpretation of economic factors to predict future market moves is almost vanishingly rare. This is a historic chance to buy Silver Bullion; it is easily and definitely, and with out question; the single most underpriced permanent, storable, commodity in the world. Note well the relative size of the Silver market. Literally a few families in Europe could form a "Hui", a gang, and buy up all the Silver Bullion in the worlds above-ground warehouses. At any time. I remain waiting patiently since 6.35$; when I bought too early. I know my mind works properly; I don't concern myself much with other peoples opinions.

disabledvet's picture

again..."manipuflation." we actually have been conditioned to believe our paper money is about to become worthless "any minute now." this has caused a HUGE asset bubble in the materials space this year which has completely collapsed this year. i would definitely not be shorting silver which isn't even close to the all time nominal high of 50 bucks an ounce set back in 1979 and the Hunt Brothers corner. no way i would be long gold here price wise as a consequence either though. (stack all you want of course.) one reminder: the dollar did not collapse in 2008. it SOARED in value. not saying i'm bullish on that so called "asset" either...but the market has been "conditioned" to expect higher prices no matter what...and lest anyone forget natural gas was half the price it was today just one year ago...an all time nominal price record low. not saying you're going to actually get a full fledged deflation here but you could get a deflationary "scare" as the Government "deploys the fleet" of the ten ships it built for the trillion dollars it spent over the past couple of years "for said purpose." (hmmm. where did that money go again?) seems to me Federal spending is in fact (outside of pay and benefits and transfer payments) massively declining as one federal program after another starts getting cancelled. the war is over in my view...it's "peace with Iran" time now.

MeelionDollerBogus's picture

almost nothing of lasting value got cheaper in 2008. That's a pre-condition for a soaring dollar.
dxy doesn't count.
dxy is a poorly weighted metric relative to other fiat currencies. "soaring" is impossible: other currencies can do worse in a short time, making one ratio look better for the USD but the dxy can't capture this. It's rigged not to be adaptive.

steveo77's picture

Meteor and Comet Attack, TPTB will NOT warn you, they will lie even after the fact http://nukeprofessional.blogspot.com/2013/03/meteor-coincidence-methinks...

Trampy's picture



Inmate of open-air prison run by lunatics and populated almost entirely by zombies is desperately seeking a pen-pal ... because God gave Eve to Adam, and Aldous Huxley gave someone to Winston Smith.

For mutual support in these trying times, am seeking fellow non-zombie intelligent, open-minded, and well-informed inmate for discussing topics of mutual interest, such as:

  1. Both actual and notional nuclear accidents, and nuclear technology of all sorts. Is nuclear safety always an oxymoron?;

  2. Same as it ever was. “Kill the man, kill the problem,” Joe Stalin. Change is a process, not an event. Chicken Little has always been wrong, so why not now?

  3. Same as it ever was. Bankers v. The People is nothing new. In 1833 Andrew Jackson took on and succeeded in killing the Second Bank of the United States. In 1963 JFK took on the Fed and was killed. The bankers will do “whatever it takes” to keep it going as long as possible;

  4. Same as it ever was. See Historical Revisionism of WW1 and WW2 as a battle of valiant truth-telling historians versus the plush OSS/CIA myth-telling “historians” as waged notably by the largely, and very sadly, forgotten Harry Elmer Barnes, 1889–1968. Many brave souls such as he have seen history through the lens of The Truth is First Casualty of War … and lived to tell the tale, or at least published before their death;

  5. Same as it ever was. See John Kenneth Galbraith 1975 Money: Whence it Came, Where it Went about the Capitalist Crisis as predicted by Karl Marx. Four decades later and still going?;

  6. Same as it ever was. 1984, Alice in Wonderland, and The Wizard of Oz as works of history – and Newspeak, shunning, straw man, murder, etc. as (largely) effective social controls;

  7. zerohedge.com as island of sanity, albeit sorely lacking in collegiality; and

  8. weaknesses in the prison system which might allow its escape and/or subversion.


ebworthen's picture

Thanks for that fellow Fight Club member.

steveo77's picture

Meteor and Comet Attack, TPTB will NOT warn you, they will lie even after the fact


Tall Tom's picture

"We've been conditioned over the years to trust paper (as) money"? Really? Well somehow that conditioning failed with me. I have not trusted paper currency for DECADES.


But for those whom were easily trained through Behavior Modification...THEY ARE GOING TO HAVE ONE HELL OF A RUDE AWAKENING.


They have placed their Faith, Trust, and Confidence into those whom are so undeserving. They shall reap the harvest which they have sown. I rest assured that they will receive that which is just.


No problems.


Collapse baby collapse.

SAT 800's picture

Yes; it failed with me too. I can specify the reason exactly; I was already a student of modern and classical history when Nixon amazed the world by reneging on the US Obligation to convert dollars into Gold. I knew immediately what this meant. So the antidote to cultural immersion is education; or study of the kind of heavy, thick, serious history books that most people don't like.

drstrangelove73's picture


willwork4food's picture

History? Like when Lady Gaga was just a new name? That far back? Boring...

Randoom Thought's picture

My reasoning is somewhat circuitous as to why I believe there will be another crisis in 2015. IMO, Obama or his handlers, knew what he was doing when he first said, then wrote the prophetic words from Isaiah 9:10. The words: "We Remember. We rebuild. We come back stronger." are in defiance of God's judgment on the bankers/moneychangers for not adhering to the Jubilee.


After progressively increasing crises it ultimately ends in the country under judgment being conquered. We may assume that at least the US is under judgment OR that there are forces that want us to BELIEVE that we are under judgment and to act accordingly. So far, we have two crises; the first in 2001 and the second in 2008.... next up 2015... and so forth.

Whatever happens, it would be wrong to assume that those words were chosen randomly. It is not as if there has not been sufficient warning, and then gods' banker at GS can most likley engineer a finacial crisis, if not something greater.

What does this have to do with gold? Well, it all depends on what kind of crisis you would expect in 2015.

Have a great day.

Billy Sol Estes's picture

Paper is good, there is plenty of it around, therefore it is good.

CHX's picture

for sure a useful commodity: you can burn it, you can write / paint on it, you can wipe your (.) with it, blow your nose, cut pretty silhouettes, etc. etc. paper is awesome, you can even recycle it. what did I miss? ah and you can declare it to have value as fiat currency. game of monopoly, anyone?

Sufiy's picture

Chinese Gold Demand And The World Gold Council’s Estimates

 Alasdair Macleod provides very good explanation for the difference between Eric Sprott calculations and WGC estimates, which are dramatically underestimating the real demand for Gold from China this year.



Peter Schiff: On Taper, China's Bombshell Announcements For Treasuries, Dollar And Gold GLD, MUX, TNR.v, GDX  "Peter Schiff talks about the bombshell of the year - China has announced the Mother Of All Tapering -  PBOC Says No Longer in China's Interest to Increase Reserves. China is ready to reduce its balance sheet and they do not have to sell any US Treasuries - during the operation Twist they have used the golden opportunity and rolled over the long term treasuries into the shorter maturities. China can just allow US to repay maturing US Treasuries. We do not think here that they will accept Bitcoin. They have made this announcement after the record buying of Gold and some people are estimating that official Gold reserves are much higher than officially recognised today."
  China, India, Turkey and Thailand Buying Record Amount of Gold - What Do They Know The Others Don't? GLD, MUX, TNR.v, GDX

SAT 800's picture

What do they know the other don't? They're old cultures. they've seen the wheel go around over and over and over again; paper-metal-paper-metal-paper; etc, etc.

SAT 800's picture

I don't think they'll accept Bitcoin, either. "The debtor is slave to the creditor"---Biblical.

RaceToTheBottom's picture

"But that all changed in 2003, and now the enormous demand by 1.3 billion Chinese over the last ten years is causing a paradigm shift, as gold and silver moves from the West to the East."

It would be interesting to know how much of Chinese demand is citizen and how much is Central Bank (CB) ?

I am wondering what would make Chinese CB act any different than US CB?  They all want Fiat currencies to live and CB having gold allows them to manipulate it to NO END.

layman_please's picture

'It would be interesting to know how much of Chinese demand is citizen and how much is Central Bank (CB) ?'


same here. which brings me to another question. who is the legal owner of the western central banks gold? this is something i haven't found a satisfying answer, because, as we know, most of the central banks are private enterprises. are they custodians for national treasuries? if not then this gold belongs to the families who also own the central banks. it makes perfect sense. instead of just holding it in their private vaults for centuries, they used it as a start up capital to create central banks and to take control of nations moneys which shows the calibre of their wealth as there were no other investments they could park it to make a profit on.

if this is the case, then this is big! current flow of gold from western cb to eastern cb is a sign, that old banking families are changing carriages and now they are in process of moving their tangible personal wealth (gold in central bank reserves) in broad daylight via open markets by just calling it gold leasing, of course with clear knowledge, that this gold is meant never to be returned.

RaceToTheBottom's picture

A lot of thing fall apart when you think of gold only as a vehicle to prop up the fiat. 

The old money FED owners can win both ways. 

They win if the FIAT goes belly up.

They win if the Gold stays low.

Nothing but the truth.'s picture

So while the Fed are playing their extend and pretend policies , they continue to hammer PM prices. Who knows , maybe they are desperately trying to replace Germany's gold inventories at the cheapest possible prices.

fonestar's picture

Everyone here claims to hate the Fed but I am calling bullshit on that.  There's other options out there (not just Bitcoin but local currencies as well) but they choose the devil they know.  Most PM investors are their own worst enemy.

SAT 800's picture

I think it's impossible to regard Bitcoin as anything but some sort of childish nonsense; that people will have trouble remembering the name of ten years from now. What local currency do you wish to reccomend?

willwork4food's picture

If man was meant to fly, then they would have wings!


Diplodicus Rex's picture


You seem to be of the belief that they are mutually exclusive. Why is it not possible to hate the FED but at the same time use their FRNs for daily commerce? How are you going to persuade your employer to pay you in anything else?


"Most PM investors"

Ahh.., the classic misdirection. I think if you look hard enough you will find that there are no "PM Investors" on this site. There are plenty of PM stackers on this site but no investors. The word investor implies that you take temporary posession of a commodity in exchange for currency with the implied intent of swapping it back for a greater amountof currency at a later date. If however the real purchasing power of the currency falls during that time more than the nominal increase in quantity then you are worse off. The stacking of gold is not an investment play. No PM stacker relishes the goal of swapping it for useless fiat. It is a disaster recovery play. 


fonestar's picture

Investors, stackers, preppers, whatever.  I think my point stands.  The global revolt against the dollar is not being led by people buying PMs domestically.  It is being led by people selling coffee in china, people selling alpaca socks online, web hosting services in Germany, new political parties in Sweden, etc.

You might expect that some of the people in the hard-money camp would be leading the charge on this but you would be totally wrong.

ebworthen's picture

Does it matter?

Can't hurt to stack some tangible while fighting the machine.

It's the pockets full of coins and small conversations and the word of mouth that moves the world.

SAT 800's picture

Your correct in your analysis. but the retail PM buyer can never be a significant, or even, measurable player in this move. I don't suppose they will do themselves a disservice by being on the winning side.

JamesBond's picture

PM... is a disaster recovery play


exactly what the majority of stackers think.  spot on analysis.




Son of Loki's picture

"If you want to keep your paper money, you can keep yoru paper money."