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Gold and the Swissie

Bruce Krasting's picture




 

Lots of things tugging on the price of gold today. For me, the most important factor was the threat of another devaluation of the Swiss Franc. The headlines from the Swiss papers:

 

.

.

 

The last time we had headlines like this the EURCHF was 1.05. Not long after it was 1.21. So it’s not surprising that this time around folks ran for the hills in fear. The CHF lost 2.3% against the Euro today on just the SNB threat of “pegging up”.

Anyone who was still hanging onto the notion that the CHF was a safe haven, puked with the headlines. So more money went to gold.

If we actually do get a re-peg it would add even more fuel onto the gold price. I think we will be looking 1,900 in the rear view mirror if the SNB ups the anti.

Hildebrand has balls to leak this story over the weekend. His timing looks like a deliberate insult to the G20. The final communiqué had this to say:

 

We affirm our commitment to refrain from competitive devaluation of currencies.

Of course Switzerland in not in the G20 so they can ignore this altogether. They can do as they please. However, this time there might be a bit of outrage from their neighbors north, south, east and west.

I’m not sure who fired the first missile in the developing global currency war. Switzerland has already thrown up its fair share. They’re going to get hit back if they launch another.

We are (again) at zero visibility on the Franc. Better to “stay away” from this one. The flip side is that the gold story gets stronger and stronger. Look for a second tier (but cash rich) Central Bank to make an announcement of a big gold buy. After all, where else would a CB put cash these days?

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Mon, 11/07/2011 - 21:22 | 1855253 Bicycle Repairman
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"Was reading about the Fed running out of cash"

What are you reading?  Comic books?  LOL.

Mon, 11/07/2011 - 22:03 | 1855306 BigJim
BigJim's picture

+++

Mon, 11/07/2011 - 20:19 | 1855153 cynicalskeptic
cynicalskeptic's picture

Plenty of eastern nations willing to buy that barbarous relic of a metal if the western CB's decide to sell.....   

Mon, 11/07/2011 - 21:21 | 1855252 walküre
walküre's picture

And pay with what? Ukrainian grain or Polish cow shit?

I could see Russia being a buyer when all they have to do is pump more oil and gas to Europe but for the rest, not so much.

Mon, 11/07/2011 - 19:07 | 1855019 apberusdisvet
apberusdisvet's picture

 

 

Hello WWIII; the preferred elite solution

Mon, 11/07/2011 - 19:03 | 1855012 DavidPierre
DavidPierre's picture

 

      The only answer? Add a few "zeroes"!

Greece... old news, now Italy. The Greek situation has no solution. They are old news and now the speculators have set their sites on Italy.

Italy's problems "size wise" are roughly 5 times the size of Greece as far as total debt owed is concerned. Has no one done that math? How about a little more math! They are all so bad it doesn't matter. The U.S. is how many multples of Greece? 40 times? Italy?

"On the books" debt in the U.S. amounts to roughly $65,000 / person. Every working, non working, rich, poor, young, old, etc. etc. PERSON in the country!

Who has an extra $65K laying around? Anyone...Buhler?

In the U.S., there is roughly 50% of the population receiving some sort of government benefit (read subsidy). Do these people have even an extra $65 laying around? If they did, do you suppose they would be willing to "give it back" for the good of their country? This $65,000 doesn't even include the "off balance sheet" debt (future obligations), if these were included what would the number be? Close to $400,000 per person? With an average 2.3 persons per household? Can you say...almost $1 Million debt per household in the U.S.? Oh yes, American are so rich (that's what foreigners say (or used to)) they all have an extra $1 Million per household to pay off the stupidity of our elected officials!

Do you see where this one is going? How long will it take for the U.S. (the inventor of this whole mess) to come into the crosshairs? I have no idea, mathematically we should have already. Common sense says the markets should not have allowed it to get where we are long before this. How did it happen you ask?

Why unfettered fiat fractional banking of course! Add in the condiments of constant intervention and "plunge protection team", plus price suppression of real monies Gold and Silver and walla, a financial "shit stew" that EVERYONE on the planet will have to endure!

THE only remedy for this is revaluation. It is reasonable to say (more than obvious) that the U.S. population does not have $1 Million per household available to pay back the debt. We don't have $100,000 per household to pay back the debt and fund future ridiculous obligations. How about $10,000 per household? OK, so $10,000 is manageable? How do we get there? Devalue the currency!

The debt absolutely MUST be devalued but devalued against what? ...Everything? Yes, and in particular...REAL MONEY!

This is the same thing (you must think in reverse here) as adding 2 "0's" to the price of Gold. Adding not 1, but 2 zeroes, puts Gold at $175,000 per ounce!

THIS may not even do it when you take into account the amount of "unfunded" and I do mean UNFUNDED derivatives of all shapes, sizes, colors and frauds! Maybe, just maybe, 1 more "0" can take care of this boondoggle!

How comical the markets are today. Greece "is a disaster", Italy "is a disaster", the U.S. "is a disaster", it's ALL A DISASTER...period.

The only solution is to revalue and go to a new currency(s) worldwide where the current debts are devalued and man can work again for something "real". Commerce can trade in something "real" where at the conclusion of the deal there is real and true "settlement". When a deal is consumated under today's conditions, there is no settlement because if you accept Dollars, Euros, Yen, Pounds or whatever, you STILL own someone else's obligation!

It is simply playing "hot potato" with obligations and never ever actually "settling" a trade or debt. Before this is all over the world will have many (or few) new currencies that have some type of backing by Gold and/or Silver.

Once people finally figure out the "real reason" that they are protesting across the globe, the protests will swell AND become much more fervent ... violent. People are protesting in many cities and many nations across the globe currently but they really don't know why. They don't have a "collective" and coherent "why".

They just know that their standards of living suck, soon they WILL figure out why.

On a side note, Italy does (supposedly) have a large stash of Gold. They may be called upon to "sell some" to shore up their finances. Maybe Gold goes down, maybe not, it does not matter. (It does if you are Italian). This may be the "end game" plans: bankrupt the sovereigns and make them dishoard their Gold holdings BEFORE any revaluation.

It does make sense and fits like an old shoe to how the corrupt "the powers that be" operate on a daily basis! None of it matters as long as you understand where we are and where we are going.

If you have PM's during the "revaluation", you will win. BIG!

www.lemetropolecafe.com

Tue, 11/08/2011 - 02:49 | 1855688 Dirtt
Dirtt's picture

Excellent perspective.

You omitted one critical caveat.  Do you actually believe US authorities will let US citizens hold gold at $7,500 per ounce let alone $175,000 per ounce?

DISCLAIMER:  You are smarter than me.  That being said, I have two words for you and every US citizen who are wide-eyed with erections over the potential for yellow brick appreciation: CAPITAL CONTROLS.  READ IT AND WEAP.

Or get the fuck out of Dodge with your PM assets now. Outside the USA is a different beast.  $175,000 per ounce?  Gold kissed $2,000 and Congress is all over that noise.  The US authorities are the biggest RAT ASSES to ever walk the planet.  Mark Twain.  Edgar Allen Poe. Einstein. American genius is in the dirt.

Tue, 11/08/2011 - 03:39 | 1855712 DavidPierre
DavidPierre's picture

Been out of Dodge for over four decades.

Fuck authorities... let them weep!

They will learn that they are the joke!

Mon, 11/07/2011 - 21:13 | 1855240 DosZap
DosZap's picture

David Pierre,

If you have PM's during the "revaluation", you will win. BIG!

If you have Black Mkt connections. beause NO WAY the PTB are going to allow people like us to get paid even $50k per ounce, much less more.

It' will be illegal yet again for J6P to own.

Those that bring it forward for swap, will be lucky to get what they paid for it.

Tue, 11/08/2011 - 02:53 | 1855693 Temporalist
Temporalist's picture

This may be good reading for you:

The Shadow Superpower
Tue, 11/08/2011 - 03:24 | 1855708 DavidPierre
DavidPierre's picture

Very interesting... there is always a way... "System D".

Merci !

Tue, 11/08/2011 - 01:05 | 1855548 DavidPierre
DavidPierre's picture

 

If you have Black Mkt connections.

Oh... maybe a few.

http://weedsmokersguide.com/pictures/BC-God-Bud-BC-Bud-Depot.jpg

How's the War on Drugs going?

Mon, 11/07/2011 - 21:35 | 1855274 fasTTcar
fasTTcar's picture

Wrong.

Even if uncle Sam said no to owning gold, it would leave American shores to willing buyers elsewhere.

Unlike various paper currencies (what would you give me for 1 hungarian Forint if you live in the states?) gold has similar buying power around the world.

 

Tue, 11/08/2011 - 03:03 | 1855701 Dirtt
Dirtt's picture

Leave American shores how? Brush up on the capital controls by executive order in the last 3 years. It's not front page news.

You better be one hell of a sailor with one helluva sea worthy boat.  Or you better get out now.

The Jews in Germany who had their life pilfered and then subsequently hawked by a young George Soros might have proffered sound advice if they weren't dealt a fate too sick to repeat.

"Leave American shores"?  Poetic.  Not in a good way.

Tue, 11/08/2011 - 04:49 | 1855761 JOYFUL
JOYFUL's picture

You are correct, of course.

But have you noticed what happens when you try to get Amerikans smart enough to hold gold to flesh out their plans for surviving the inevitable arrival of capital controls, in this post-Constitution age of full spectrum DHS/TSA dominance? It's the glassy-eyed moment.

Then the rebuttals: Over my dead body-out of my cold hard fingers, they'll come for my gold but I'll give them my lead, yabba yabba, etc. etc.,

Or,

vote Ron Paul and the entire Secret Government takeover of the Republic is going to just go away as if it never happened...we'll just wipe the tape right back to November 21 1963....that was easy!

Or,

well, you get the picture...hundreds of thousands of $ spent on survivalist gear, supplies, hideaways, off grid, bug out gear, ammo, secession state, last redoubt, you name it, thousands of oz of AU/AG stored away waiting for that precious moment when it saves the day....bring it on, I'm ready....

and yet,

at the end of the day, when THEY outlaw your gold, you gonna be an outlaw.  Your ready for that, right? Ooops, I forgot about that Merikan police forces introduce fly over surveillance with drone technology operated out of centers staffed with (on loan) MOSSAD trained ZOMBIES who think you are your family are nothin but Pashtuns deserving of a little COLLATERAL DAMAGE thing!

DOh!

Disclosure: believe in gold as the true path of resistance to tyranny, am fulled vested in physical, but sleep better at night now knowing when Charlie's in your lines and the rest of the crew are doped out on hopium, you don't defend a busted perimeter.  You walk and fight another day from a stronger position.  Junk away, you in the pot, I'm not.

Tue, 11/08/2011 - 04:18 | 1855738 DavidPierre
DavidPierre's picture

 

With four decades of experience, I am still lucky and alive and one hell of a sailor with one helluva sea worthy boat on a coast with thousands of miles of isolated islands and deep fyords.

Someday, on a ZH gold thread, I'll relate a story told to me by James Turk as we drank beer in a corner at a GATA reception years ago.  How his father got their family out of Fascist Europe only one step ahead of the Nazis because he had bullion to barter for their passage to Montreal.

Tue, 11/08/2011 - 00:36 | 1855561 CrazyCooter
CrazyCooter's picture

Yup, I think I could take up jewelry making.

TSA to Cooter: Excuse me sir, do you think you are Mr. T?

Cooter to TSA: Fool!

TSA to Cooter: Step over here sir...

Regards,

Cooter

Mon, 11/07/2011 - 20:15 | 1855146 defencev
defencev's picture

 You are posting some trivial staff and pretending to some kind of originality. There is nothing original in your post. In fact, what you are describing as a "solution" is a traditional Keynsian bullshit. People, who hoard the Gold obviously would love to see such an outcome. But from the general viewpoint a very natural question arises: why people who hoard yellow metal should win and those

who have their savings in cash should loose? What is so special or highly intellectual in hoarding Gold? Why if someone hoarding the Gold is something special? Did he contribute to the society in some special way? My questions may sound idiotic but THEY WILL BE ASKED BY POWERS THAT BE AND SUPPORTED BY VAST MAJORITY OF POPULATION. 99 percent WILL BE IN FAVOR OF CONFISCATING GOLD AND OTHER PRECIOUS METALS under the scenario you described.

 In the end of the day the issue is political and what kind of remedy will be chosen (printing, austerity or something in between)

will depend on who is in power. If it is Obama, he will not hesitate to go after new category of "fat cats" who hoarded the Gold.

If it is somebody like Romney, we may try to meet our debt obligations in honest way: by creating jobs and growing economy

(which is possible by commiting to natural gas to which destructionist Obama absolutely resist).

Tue, 11/08/2011 - 06:07 | 1855800 Overflow-admin
Overflow-admin's picture

Who understands what really is "economy"?

 

Keynesians: FAIL
Gold bugs: FAIL
Socialists: FAIL
Scientologists: FAIL
Capitalists: FAIL
robotrader: FAIL
TPTB: FAIL
Trolls? might have a point but how much lurkmoar do they need?

Food for tought: http://www.youtube.com/watch?v=4Z9WVZddH9w

Please bash and trash.

Tue, 11/08/2011 - 05:05 | 1855769 fredquimby
fredquimby's picture

What makes collecting gold hoarding and collecting paper saving?

 

Tue, 11/08/2011 - 06:30 | 1855810 margaris
margaris's picture

sunshine + farts + propaganda?

Tue, 11/08/2011 - 02:28 | 1855673 Troll Magnet
Troll Magnet's picture

defencev,

i've read some stupid shit in the comment sections of this blog but that was some really stupid shit.  the fact that you're still stuck in "obama or romney" alone should discredit you but the rest of what you wrote is just so absurd and twisted i don't know what to say other than: BUY SOME GOLD!  if it's too expensive, BUY SOME SILVER!  you have nothing to lose and a lot potentially to gain.

Tue, 11/08/2011 - 01:48 | 1855649 IrritableBowels
IrritableBowels's picture

Junked for using 'Romney' and 'honest' in the same sentence.

Mon, 11/07/2011 - 22:34 | 1855340 robobbob
robobbob's picture

you're kidding right? Romney is as bought as Obammy. A fully vetted and endorsed establishment flunky. The best you could hope for from him is new curtains in the WH, but those checks to wall street will continue.

Mon, 11/07/2011 - 20:44 | 1855202 knukles
knukles's picture

(Oh please dear God, generously allow this fucker to die a graceful peaceful death in his dreams tonight so that we may not be puished with this kind of absolute nonsense again.  Amen.) 

Mon, 11/07/2011 - 22:19 | 1855322 akak
akak's picture

"...And Saint Attila raised the hand grenade up on high, saying, "O LORD, bless this Thy hand grenade, that with it Thou mayest blow Thine enemies to tiny bits, in Thy mercy ..."

Mon, 11/07/2011 - 20:33 | 1855177 Oswald Spengler
Oswald Spengler's picture

Revolution bitchez!

Mon, 11/07/2011 - 20:51 | 1855161 DavidPierre
DavidPierre's picture

 

Romney Dupe:

Zip up!... Your "Trivial Staff" is exposed.

Not everyone on ZH is ameriKlan!

What you are describing is of very little importance and of no value in the much bigger world.

Mon, 11/07/2011 - 21:27 | 1855256 defencev
defencev's picture

If you are not ameriKlan, it is O'K but does not change anything in my assessment of your post as absolute bullshit. In the new bright world when everybody will loose everything, there will be nothing bright: what kind of universal money which will preserve their value are you talking about? There is no and  there will be no such money. The Gold will never make it return in this capacity.

Also, no matter who you are and where you are what is going on in America will be of ultimate importance for you. Such is (and will be for a very long time) the role of this country.

 You guys will never hide behind your Gold or anything else. Either America change the course towards productivity and economic freedom or this world is doomed.

Tue, 11/08/2011 - 00:33 | 1855513 DavidPierre
DavidPierre's picture

 

You are ameriKlan! It's O'K

The rest of the world understands your ignorant arrogance. 

But this does not change anything in my assessment of your post as absolute bullshit.

In the new bright world when everybody will loose everything, your lax education and unleashed  flights of fancy have untied your mind.  Not being rigidly fastened or securely attached to the real world outside your limited and Fascist controlled borders you have worked partly free from reality and world history.

Universal GoldMoney will preserve value as it has since the dawn of recorded human civilization. There is such money. Gold will make a return in this capacity.

Also, no matter who you think you are, or what is going on in your Nazi/ameriKlan mind, it will be of ultimate importance for you. Such is (and will be forever) the role of the Fates and Hubris.

You guys will never hide behind your Fascism or anything else.

Either America changes it's own dirty diapers or the world will do it for you.

Mon, 11/07/2011 - 21:48 | 1855286 Vlad Tepid
Vlad Tepid's picture

Not the old shining beacon on a hill crap again.  It sounded cliche when Reagan talked about it...now it's just an outright lie.  And ROMNEY is your White Knight?  Please.  His only redeeming trait is that he can understand the same language (Bankerese) that his marching orders come in, as opposed to Obama who needs them translated through a Teleprompter.

If you can't see that the US is heading full-tilt into corporatist fascism, fueled by the burning shreds of the Consititution, then you are beyond intellectual redemption. 

Mon, 11/07/2011 - 22:37 | 1855339 akak
akak's picture

Romney is the most sickeningly pro-Establishment, pro-warmongering, pro-Police State, pro-status-quo, pro-oligarchy, pro-everything-currently-wrong-with-the-USA presidential candidate (who is continually forced down our throats by the corporate media despite almost NOBODY wanting or supporting him) that it amazes and disgusts me that ANYONE can even take his plastic mannequin candidacy seriously, much less rally to it, something that I have no doubt only the most fervently conformist deniers-of-reality could manage.

Speaking about "growing the economy", how's that draconian, statist, one-size-fits-all, fascist, mandatory health plan of yours working out in Massachusetts, eh Mitt?  Or do economic unintended consequences simply not exist in the  Moron alternate universe of yours?

Tue, 11/08/2011 - 02:50 | 1855690 Temporalist
Temporalist's picture

You mean "I'd have to ask my lawyers" Romney?  Yes Mitt, U.S. citizen's would like you to ask your lawyers what to do as president because they all know how lawyers will adhere to the letter of the law on behalf of Americans.

Mon, 11/07/2011 - 19:33 | 1855068 CrazyCooter
CrazyCooter's picture

Stealing this from an old post I made. I got the idea from a Jim Rickard's interview over on KingWorldNews (no idea which one - there are like 50 of them over the past couple years).

He suggested taking M1:

http://www.federalreserve.gov/releases/h6/hist/h6hist1.txt

And then taking the US proven gold reserves:

http://en.wikipedia.org/wiki/United_States_Bullion_Depository

http://en.wikipedia.org/wiki/West_Point_Mint

I believe the rough/approxinate total is ~8k tons between these two where there is approximately 32000 ounces in a ton.

So, in grade school I learned how to take 2,098 billion and divide it by (8000*32000) which is roughly 8k/oz?

Lets assume a 40% reserve ratio, which would net ~3.2k/oz.

You can take what ever number you think makes the system solvent again and come up with your own gold price. :-)

Regards,

Cooter

Mon, 11/07/2011 - 19:18 | 1855039 duo
duo's picture

If I pay the gov $650,000, can I have ten slaves for life?

Mon, 11/07/2011 - 23:27 | 1855442 delacroix
delacroix's picture

slaves, can't own slaves

Mon, 11/07/2011 - 19:30 | 1855060 ArmchairRevolut...
ArmchairRevolutionary's picture

On the open market, I think that would buy about 32.5 man years of low quality slave.

Mon, 11/07/2011 - 19:34 | 1855071 Al Gorerhythm
Al Gorerhythm's picture

Or 10 politicians at half the rate. 

Mon, 11/07/2011 - 18:37 | 1854944 jimmyjames
jimmyjames's picture

It happens first in little fits and starts and sputters along for a few years-leaving the nay sayers out and flushing the weak hands along the way with its volatility and then it gains momentum as governments become concerned about the market pricing of their currencies and then a major starts heading south and the danger of collapse becomes real and then comes an announcement of a gold weighting and then the contagion starts to spread and then governments and central banks are forced into buying gold on the open market and that causes a commercial bank short squeeze that will spike the gold price to who knows where-

Mon, 11/07/2011 - 20:58 | 1855222 Bay of Pigs
Bay of Pigs's picture

Well, look who's here postin at the Hedge!

Just a shade under $1800 now. Remember when we were telling people to buy at $690 in 2008? Most people on that blog thought we were crazy.

Mon, 11/07/2011 - 22:50 | 1855366 MsCreant
MsCreant's picture

Not me. I asked folks over there if they thought I should buy 10 Krugs for $8000. It was after Mish posted "I like Gold here." You, him, and Queen Bee gave me the courage to do it. Gordon Gekko over here urged me on with cost averaging and I have never had any regrets (I misses me Gordon Gekko, where is that wonderful, arrogant, bastard. I like my gold buggy buddies. Been doin' real well! I know you know most of this, but it does not hurt to say it again. Thanks for the wisdom, sir. I imagine you sitting on the beach in a beautiful paradise and it makes me happy.

Mon, 11/07/2011 - 23:18 | 1855422 Bay of Pigs
Bay of Pigs's picture

Hey Missy, Thank you so much. I really appreciate that. We've endured some hard times together but we keep coming out stronger than ever, dont we? 

Please come visit at Turds sometime. We got a good gold and silver blog going on over there. I've met some really great people there.

Peace and Aloha my friend.

BTW, that's "used" up there above us. Another good dude. And yes, where's is old Gordo these days? I miss some of those vets that used to post here.

Tue, 11/08/2011 - 11:41 | 1856489 jimmyjames
jimmyjames's picture

Bay and Ms-

Good to see both of you--

I know you two are solid to the core-

 

Mon, 11/07/2011 - 18:19 | 1854895 terryfuckwit
terryfuckwit's picture

me first

Mon, 11/07/2011 - 23:26 | 1855437 JuicedGamma
JuicedGamma's picture

Tyler can we get newest sorted first back? It disappeared at the revamp.

Mon, 11/07/2011 - 19:32 | 1855067 bank guy in Brussels
bank guy in Brussels's picture

Thanks for the laugh.

Actually I miss the fact ZeroHedge doesn't have so much of the childish competition for 'first' comment places on threads ... it always gives me a chuckle to see it leading comment threads on other sites.

Yes we're all reading about serious and important things here, the financial world blowing up and so on, but a little foolish levity does no harm.

Kurt Vonnegut said « Life is nothing but high school … you get into real life and that turns out to be high school again... » !

But really, sometimes it seems just like kindergarten! 'First!' Ha!

Mon, 11/07/2011 - 20:54 | 1855217 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

It always turns out that all the brilliant things my friends say are Kurt Vonnegut quotes.

-Kurt Vonnegut

Tue, 11/08/2011 - 05:28 | 1855776 fredquimby
fredquimby's picture

Hey LH, No new Same as it ever Was posts for a while now??!!:)

 

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