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Extraordinary Popular Delusions And The 'Madness' Of Bond And Gold Markets
Whether its new-fangled Japanese stocks, hi-tech internet company valuations, multi-colored flowers, or mansions made affordable by criminally lax lending standards, Grant Williams notes that a bubble is a bubble is a bubble; and citing Stein's Law: "If something cannot go on forever; it will stop." In this excellent summary of all things currently (and historically) bubblicious - whether greed-driven or fear-driven - Williams concludes it is never different this time as he addresses the four phases of the classic bubble-wave: smart-money, awareness, mania, blow-off (or crash) and explains how government bonds are set to burst and gold is only just about to enter its mania phase. This far-reaching and entirely accessible presentation is stunning in its clarity and as he notes, while bubbles are always easy to spot ex-ante, understanding how they come about and why they are popped gives the few an opportunity to profit at the expense of the madness of crowds. From tulips to tech-wrecks, and from inflation to insatiable stimulus, the bubble in 'safe-haven flows' that currently exists has all the characteristics of a popular delusion.
The first 9 minutes provide all the required background.
The next 10 minutes addresses the details of debt, government largesse, and why government bonds are 'peaking' and gold is about to explode - as the safe-haven 'tie' between the two is about to be smashed apart...
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OT but anyone on here seen the documentary "surviving progress"? A few people recently told me to check it out.
When bonds go south and gold goes north the financial system will collapse. But don't look for a warning sign because the collapse won't come announced.
http://seekingalpha.com/article/922591-the-financial-collapse-won-t-come...
It's always a little troubling when I see someone link to Gary Weiss's website. He's a shill for most everything zh readers (or any sane persons) despise. No offense intended toward you markmotive -- I assume you probably didn't realize:
http://www.deepcapture.com/gary-weiss-scaramouch-psychopath/
Thanks, that is a fascinating and very disturbing investigative article you linked there on Deep Capture, very thoroughly detailed.
Among the interesting stories there ... is the detailed description of the utterly criminal corruption of the CIA's Wikipedia re Gary Weiss, hiding and deleting items and ruthlessly suppressing people trying to present facts ...
And also these fascinating tidbits about one of the hidden 'deep core' elements of the US (and global) financial system, the DTCC or Depository Trust & Clearing Corporation, extremely powerful but essentially beyond the reach of any regulation whatsoever ... and Gary Weiss apparently working to cover up its shady activity. In the article:
« ... a nearly unknown corporation ... DTCC ... The company provides settlement for the nation’s capital market: $1.5 quadrillion in trades are settled there every year (that is, about 30X the economic output of the entire planet). For most of its history it has largely escaped regulation: state regulators are admonished that they cannot peer inside because the DTCC is federally regulated, and the DTCC has told federal regulators it escapes their regulation due to its strange ownership structure (one former federal regulator, and one former employee of the DTCC, have both told me the feds would not know where to begin if they tried to regulate it).
In short, at the heart of the world’s economy is an enormous black box that is regulated except on the days it’s not, and through which 30X the economic output of the world flows. It is my contention that much of Wall Street’s illegal activity is funneled through this strange entity.
The huge, nondescript building in downtown Manhattan that houses the DTCC is something of a Fort Knox. Long-gun toting guards watch the entrances, and journalists who have been inside tell me that entering it is tougher than getting into the Federal Reserve or any comparable institution. ... »
http://www.deepcapture.com/gary-weiss-scaramouch-psychopath/
Great post! Did you get the chance to read "the 22 chapters" at deepcapture before it was taken down by the Canadian Court a year ago? Best "conspiracy theory" of all time, and the most thoroughy documented and most well-proven. Patrick Byrne is an American hero. Big supporter and friend of Ron Paul BTW. Those 22 chapters were totally scrubbed from the Internet. Even from Google's cached pages and from foreign-based mirror sites. I'm convinced that TPTB didn't want all that to get out. Byrne proved beyond any doubt that Lehman and Bear Stearns collapsed due to a financial attack (mostly illegal naked short selling) by a conspiracy of people including the Sicilian and Russian mafias, the Russian government and the royal family of Abu Dhabi, various wealthy international weapons dealers, and with the (perhaps unwitting) help of certain people in it just for the money, like Jim Cramer and Gary Weiss and their buddies in the SEC, on Wall Street, etc etc. The usual suspects...
These financial wars, and currency wars, are raging, and TPTB are (mostly) hiding it all from us, even as they continue to prop up the institutions and a system that makes us so vulnerable to them in the first place. When deepcapture went back online in January of this year, it was a very different site. Still a great site though.
I have all the material from the original site saved. Almost every day I ask myself whether to post it on some blog. I had a blogspot blog until a year ago that made a good deal of money from Adsense. Google took it down without explanation. It was a trader's blog. But now and then I threw in a link to deepcapture with an excerpt...
NWOrange: POST IT UP! That was some fucked up soiopathic shit on Gary. Reminds me of this pathalogical woman i used to know. That man is truly deranged and dangerous. POST IT UP!
Couldn't do it here of course. Book length. Not sure I wanna' be the next Julian Assange either. What's in it for me? Heh. I do consider it often though. Maybe once I'm a bit closer to the grave...which shouldn't be too long;)
did some one said thepiratebay and bitTorrent ?
too easy to post anonymously. same reason you have it is the reason to post it.
PS i can assure you that it was Russian Mafia involved, but in no way were Italians involved in an meaningful way.
"PS i can assure you that it was Russian Mafia involved, but in no way were Italians involved in an meaningful way"
Heh. I guess I'm not too sure about "anonymous posting" really being anonymous. For now though, I'll just say this. The short version:
For years, certain people and entities, many of whom are household names, have been intentionally conspiring to destroy many perfectly good companies, by way of massive naked short selling and by using their public platforms to junk/lie about those companies to drive the price down. Jim Cramer is the poster boy http://www.deepcapture.com/jim-cramer-is-a-complicated-man/
A number of folks at CNBC have been in on it from the get-go. David Faber, Bob Pisani. Cramer bragged about a lot of it in his own book and said that if they needed someone to junk a company, one of their go-to people was Bartiromo -- she'd say whatever they asked. Many others are involved in this -- it's vast.
Certain foreign elements -- "terrorist" and terrorist financiers, weapons smugglers, hostile governments and so on, realized what Cramer and Co. were up to. It's not a big secret on Wall Street what Cramer & Co. have been up to for many years.
http://www.youtube.com/watch?v=3bBKrTKHqcg
http://www.youtube.com/watch?v=FP3YyJz3HsU&feature=related
Those foreign elements apparently decided that Bear Stearns and Lehman were weak links and jumped on Cramer & Co's company-destroying bandwagon not (only) to make money, but to collapse the U.S. financial system.
I have called Obama a traitor of epic proportions for signing the NDAA law. I stand by that. But I do wonder if it wasn't intended for guys like Jim Cramer and his cohorts.
And I must admit, at times I wonder if at this point, it wouldn't be best if the whole thing did collapse, before Skynet is fully operational.
One thing is for sure: The policies and practices of our own government and of the Fed have put us in this precarious position where we are obscenely vulnerable to people like these.
Cramer and many others he's connected to is damn lucky that Patrick Byrne's good friend, Ron Paul, isn't about to be naming the next Attorney General.
Well, as Alex Jones explains all the time, you now have two choices. Either serve it up and get it out there one way or another, or they will come and take it from you and perhaps you will perish. If you think that your identity is safe here on ZH, you are a fool. Alex Jones has told people this while interviewing them on his show, and some have realized he was right and published. They are still around. There have been a significant number that have not and have either gone to jail or perished. This is not a game.
If the data is what you say, you better act now.
The DC Madam, and Breitbart are two who Alex told to publish and they didn't.
Publish it. You won't need to worry about your safety as the sheeple are so conditioned to believe the gov's narrative, that there is no evidence that will ever wake them out of their sleep. Even when the shit hits the fan, they still won't belive it.
NWOrange:
Here I'll post it up: http://vastdom.blogspot.com
(It's not copyrighted material, is it?)
You have the "22 chapters" on the original deepcapture site before it got scrubbed? Can't imagine where you could have found it but I'd like to know how if you did -- I have been unable to find it and would gladly post a LINK to it if it were already up somewhere.
Byrne has always said that anyone is free to disseminate it at will, unedited.
let's do it!
i'll post it right here: http://vastdom.blogspot.com
NWOrange: you will need to send it to me so that I may serialize it.
I appreciate your enthusiasm vast-dom. Often enjoy your comments. But if I was willing to send it to you or anyone, I'd just post it. And I probably will pretty soon, one day when I get a wild hair...I wonder if WikiLeaks is accepting unsolicited manuscripts?
LINK TO 21 CHAPTERS NOW UP.
Posting all 21 chapters to:
http://vastdom.blogspot.com
Enjoy. And thanks to Wouter.
THAT'S FUCKING AWESOME! WTF DID YOU FIND THAT?
BTW, I have 22 chapters saved...I'll be visiting your blog and comparing...and will send you Chapter 22 if your posts don't include that material.
I hope you're not counting on any income from that blog...Google, as you may know, is notorious for censoring them/taking them down.
EVERYONE SHOUE READ VAST-DOM"S BLOG FOR THIS MATERIAL. IT WILL BLOW (AND OPEN) YOUR FUCKING MIND LIKE NOTHING ELSE. THERE IS NO BETTER "EXAMPLE" OR PROOF OF THE WANTON AND BLATANT CRIMINALITY OF TPTB AND THE PEOPLE ON WALL STREET AND AT THE SEC AND OTHER AGENCIES.
Holy shit guys...
Thanks so much for posting the chapters vast-dom - I look forward to the reading.
Yes PLEASE let's get chapter 22 up ASAP! Can you send it to me NWOrange?
Look out for more posts in near future.
If google takes anything i post down I will put up my very own blog server so no worries.
Thanks VD
Hey, read this while you're at it:
Secret Weapon: How Economic Terrorism Brought Down the U.S. Stock Market and Why It can Happen Again - Kevin Freeman (on Audible.com also)If even half of what he says is true...well, you know...
@ the fonnonzah :
www.torrentprivacy.com
+
www.utorrent.com
+
http://thepiratebay.se/torrent/7641013/Surviving_Progress_-_2012_-_Docum...
=
http://www.youtube.com/watch?v=hGlkzryn7Zk
So I ´am just lucky to have read up on those extraordinary popular delusions and the madness of crowds back in 1997 ? Bought my first gold in 2007. Still some 20 felt years behind on preparations by now and
ready to dispose off some rare books in my library... well wait, no nuke gone off yet, let`s play civilization for the time being...
You just announced it.
Yes -- but it should be called "Killed by Progress". It's great if you're looking to feel hopeless.
Gold bitchez....
+ 1 Very good, second reply, beat me to it.
Gold is going MUCH higher...
Food bitchez...
Exactly. I own gold and silver, but I realize the odds of my surviving long enough to actually use it, and to use it without drawing unwanted attention (to say the least) is very, very slim.
PLATINUM GOLD RATIO BITCHEZ
edit: Long toothbrushes and floss, bitchez
edit @ clockwork orange dude: GUNZ + CABIN + BIODOME + PORNO MAGS... BITCHES
Agreed.
The number one thing, even more than community, is to never let your guard down. Don't get comfy and complacent until it's over, that is, if it's ever over. That will be the hardest thing for all of us.
When you cold and hungies and the outside world is not a safe palce to be, a can of baked beans could very well be the most amazing thing ever.
Long food!
Giraffe barbecue bitchez!
Gold and silver I already have, enough to weather through a 10-year storm. I don't like the taste of canned food too much, however. Relocating to a country that is a major exporter of food and oil, is therefore on my agenda next. The country of choice just granted me a permanent resident visa.
The funny thing is, that I'm a citizen of a so-called wealthy country. Why do I have to do something like this?
Technically, bonds are at a very difficult juncture. I minor decline would technically make gold explode, and bonds enter a severe bear market. Since mid September, bonds have been sitting on a cliff, however, the recent correction of gold has provided a breather.
But a minor decline might imply "game over" for bonds.
Basic analysis:
http://www.dowtheoryinvestment.com/2012/09/dow-theory-spells-trouble-for...
Update:
http://www.dowtheoryinvestment.com/2012/10/dow-theory-update-for-oct-5-m...
Of course, under such scenario one has to wonder whether GLD suffices or one should have physical gold:
http://bit.ly/R7pAjs
Physical and anything with value. Your milage may carry on whatever it is regionally.
Didn't Peter Schiff say in his book that before bonds collapse they would skyrocket because nobody will want them, and the government would be buying them to keep them from falling, and then everybody would jump on the bandwagon, creating a hysterical bubble?
Fofoa says something similar concerning the twin brother of bonds, namely the USD. He says that in the final phase we can see both gold and the USD going up. Eventually, though, gold is to shine alone.
Fofoa is a blogger who is worth considering. A very balanced one:
http://fofoa.blogspot.com/
it takes time to understand him but the investment is worth the effort.
Wow! Good stuff. Thanks!
Yes and the Euro is set up to take advantage of this for this exact reason
http://freegoldobserver.blogspot.ca/2011/09/is-euro-system-next-monetary...
And the Smart Money Sez . . .
10 YEAR NOTE :
https://docs.google.com/open?id=0B16Nxp5pgJBzTzVTZTVYSU5hQ2c
GOLD :
https://docs.google.com/open?id=0B16Nxp5pgJBzOHA2OVd0STREQWs
30 YEAR BOND :
https://docs.google.com/open?id=0B16Nxp5pgJBzZk1QczZ1eWNBazA
The money supply growth rate is increasing, and it won't be long until inflation heats up. Inflation combined with a flight away from safety will spell doom for bonds. However, I am a bull on housing. Real estate is going to skyrocket and now is one of the best times to buy. Check out this article that discusses hedge funds snapping up foreclosures:
http://www.globaleconomicmonitor.com/2012/10/housing-is-starting-to-heat...
Excellent, why don't you buy a house in Vancouver AND Toronto. Let me know how that works out for you in 5 years time...
Unless of course you mean the $1,000 houses now on sale in Detroit... now THAT might be a long term good investment (after the Detroit zombies finish eating eachother).
I got an inside tip that the FEMA camp timeshares are going to go to the moon.
Do you know why the $1,000 houses in Detroit area are not clearing the market? From what I understand, the municipalities want the back-taxes owed (in some cases >$25,000) plus >$2000 per year, for a tear-down. If anyone has better info on the situation, feel free to link a source.
I made a short video on the topic of fractional reserve banking.
http://www.youtube.com/watch?v=tkfi1yUjbwI
Keep chugging along with the Chinese or pull out before you fill the glory hole losses.. Decisions, decision. Tis Tis!
http://www.georgesoros.com/articles-essays/entry/the_tragedy_of_the_european_union/
Soros is a Chinaman? It all makes sense now...
Here's an idea, how about posting JUST the title and the link (and maybe a select quote) instead of copy/paste the entire article? Could that work out for you?
Sure Flacon, but my correlation between describing Soros financial bets would have been lost without his Chinese broken translation. Furthermore, this will also affect a large pool of WH public servants who are interwoven in the largest crime theft in history. Flacon, I imagine you’re not the sharpest tool in the shed. However, a full length of his unedited OPEN SOCIETY speech was provided by the form of a Hyperlink.
Psst. Good luck trying to be a chameleon to blend in with new changes. Thankfully, all your computer keystrokes will expose you. Not by this site, but your social networking entries. Hahahahahaa..
Funny, when I follow the link the typographical errors seem to be gone; they only exist in your version.
That is correct grasshopper
Gold prices are certainly going to explode fairly soon. The problem is, it's unlikely that many people, if any, who own it will ever get a chance to use it, and almost anyone who tries may as well paint a bullseye on their back. Once this global ponzi scheme collapses, in the ensuing breakdown of society and the global supply chain and of civil order, so will thousands of nuclear reactors around the globe. A lead suit will be far more likely to save you, though "far more likely" means about "1 in a million".
All that said, I still own gold and silver in the dim hope that the long period of attrition will end and somehow I'll actually get to use it, and in the very dim hope I'll still be around. If you "own" real estate or most anything else, don't expect anyone, including the new powers that be, to recognize your right to it or to anything else.
In fact, rest assured, when the SHTF, various "authorities" (and criminals with certain "access") will be poring over comments posted on this site and plenty of other places and if they think you own gold, you're gonna' get a special visit, and they're gonna' do whatever they want to you to make you cough it up. That goes for me too -- but I don't expect to be around much longer anyway and I'm living all I can before it's too late for that.
The end-game isn't going to be the exhilarating Hollywood movie a lot of folks here seem to think. It'll be far more similar to, and at least as dangerous as, if you were literally thrown into an arena with a bunch of hungry lions with nothing but a butter knife, and if you somehow fight your way thru that, you'll still have to face the folks who threw you to those lions to begin with.
Are you here because you've failed at most everything in life, or don't even have the balls to try, and you feel that a total collapse of civilization will "justify" your failings? Because that is probably the essential characteristic of most of the people who post here. Just sayin'
"Are you here because you've failed at most everything in life, or don't even have the balls to try, and you feel that a total collapse of civilization will "justify" your failings? Because that is probably the essential characteristic of most of the people who post here. Just sayin'"
Projecting? Or do you care to elaborate?
He is crying out for help. Many people are suffering with severe depression and it will only get worse.
LOL! Clearly I hit a few nerves...
Perhaps...I'm not sure. Your conclusion was just kind of trollish. So I was all ears if you cared to elaborate.
=\
I think most of the real people who post here squirm around in a little box of helplessness into which they were forcefully kidnapped. People who are able to gauge utility (of anything, really) properly weep at the way things have turned out, the way the people have turned out. As a generalization, people have no more utility. People's actions have no more utility. It's all kind of empty now. Show me a population in which each and every member cares about all the other members and the fragile ecosystem that houses the whole damn thing... maybe then you'll have found group of people who have earned their place here. I don't think we as a collective have.
Very well stated IMO. You're a little more "diplomatic" than me.
Better to be completely prepared to dig in and also to drop everyone and just leave. Maybe with only what you can carry on your back. Being as invisible as possible in any situation is probably the best move.
Who knows what is going to happen.. and I think it is fair to say that some places will do better than most. Material things will be the monkey trap for many. Normalcy bias will be the other big killer (aside from basic stupidy... Darwinism about to make big comeback).
One can only hope that some degree of infrastructure remains to keep those nukes running. None of them are really prepared from what I understand for a sudden and prolonged shut down. So, do we wish for some sort of police state wherein such infrastructure is maintained? Damn. No matter what direction one looks, there is no good exit.
Seems to me that the next chapter of the human saga is going to involve alot of people leaving the planet unexpectedly and in short order. PMs in my opinion, may not be for re-establishing wealth in a new system. But, rather as a ticket out of some rough spots during the transition.
Another great comment centerline. And I agree with every very well-stated word of it. Darwinism...yes. As it was just stated in an article here today, "anything that can't go on forever, stops."
There is always a bigger fish. When it comes to sentient creatures able to destroy everything, a distributed mental construct (God being one of them, money another) is a bigger fish than an individual mental construct and it can and will fucking eat you.
Survival of the fittest - weak in mind need not apply.
“It is not the strongest or the most intelligent who will survive but those who can best manage change.”
? Charles Darwin
Some here are apathetic and venting.Some not.
Some of my stash(lost in an accident, unfortunately) WAS allocated for
the required ammount of bribery.Got used to doimg it for trade in the mid east
and behind the iron curtain.Graft will become the major source of
income for low level beaurocrats, and petty officials as this develops as it will still will drag
on for months once it starts..Silver coin,first,gold if required.
Damn,wish it hadn't got lost.
If the nuke plants go,all bets are off.Goodbye homo sapiens.
Even that will take years before everything is dead.
Enjor yourself while you can,for we all die on a long enough timeline.......
The one hope is that the operators of those nuke plants, when they see the SHTF, will shut them down properly and have no melt-downs.
When shtf, no one knows how it's going to be. That's why i bought pm's and one good knife. For the rest, i will improvise. I have to.
I agree but there's nothing wrong with a little slave revolt.
Keep in mind just how much history changes. For most of human history, we were hunter gatherers with very sparse populations around the globe. And then came the agricultural revolution.
For most of recorded human history, civilization was centered around the Middle East, Meditteranean, and China. Northern Europe and Britain were backwaters and America wasn't even in the equation.
Just 100 years ago Europe was the most dynamic civilization on Earth and ruled over vast stretches of the globe, and they thought that would last forever. Just 25 years ago the Soviet Union was still around and China was on nobody's radar.
Think about just how much America has already changed since the turn of the century.
So look to the future. Think about how you will be a part of the changes that are coming.
''The market for financial assets should be worth approximately $250 trillion. It includes mortgage bonds, equities, treasury bills and related financial instruments. It contains pure paper assets and does not include real estate or derivatives. Against that $250 trillion stands a nominal value of the gold market of around $4 trillion.''
http://www.forexpros.com/analysis/the-wealth-transfer:-from-paper-to-har...
Thanks Tyler!
Just another example of why zh, for all its purported faults by some posters, is the must read financial site.
V.
>l you are here l<
2nd that!
so what about the Vietnamese?
YouTube - Colin Farrell uses a perfect rhetorical device + fists when confronted by an 'Ugly American' (scene from In Bruges)
...
so, what about that contagion of Romnesia blanketing the country?
YouTube - President Obama on the Viral Outbreak of 'Romnesia' that Threatens the USA
(not so funny... O needs to work on timing... ;)
Even though, "it can't be eaten"...That gold, is sure in demand!
No time like the present...BUY, BUY and BUY!!!
You can eat it. It's the recovery of it that's the messy business.
Its been a long time. Since bears ruled the bond markets. I am old enough to have been trading fixed income futures back then, In the days when UK base rates could move up 1 or 2 percent at a time - occasionally on consecutive days!
The markets could not cope with adverse moves of that size sigma now,way too Much leverage in use and risk models fine tuned to exploit said leverage over a decade plus of falling yields. So I will resist the strong temptation to be on the winning side Of the Move. If its big there will be no counterparties able to honour the trade anyway.
I predict that when the SHTF methamphetamines will be more in demand than gold.
Would you like some tulip bulbs to go with that?
Ha Ha. Poppy pods too.
Ammo, hookers and blow.
A bond bubble is not an ordinairy bubble. It will change the world. Bonds are not groing up in a tulip nursery, be careful.
My only concern with the gold market. Parabolic, http://www.kitco.com/LFgif/au75-pres.gif My life savings is in a gold so I keep my fingers crossed that it still has a long way up to go.
Do we know how much actual gold is in people's possesion (government, banks, investors) in the entire world? Also, do we know who is sitting on the most gold? I have read it is the Central Banks.
FIRST the difference between paper and physical has to be recovered. The rest is not important.
So you didn't watch the video then?
It's hard to measure the private holdings of gold in India. It's hard to measure the number of people in India for example. But there's a certain truth in the number i believe. More truth than the official Fort Knox or LBMA holdings.
I'm not disputing the video's estimations, but I was wondering if these estimates are accurate, or at least can be proven to be accurate? I am in the learning phase.
Lesson 1: nothing's accurate
Lesson 2: see lesson 1
Don't look for prove. Trust your instinct. I'm in the learning phase too.
That's very reasonable. How do you and others feel when an investment firm posts articles promoting gold (or any other commondity) when they are in the business of making money off of the featued commodity? I got emails all the time about buying gold and I see a few of those same companies posting here. I know nobody has a fool proof answer, but there has to be a check and balance to prevent a gold hysteria, or a "mania".
It's hard to measure the private holdings of gold in India. It's hard to measure the number of people in India for example.
Very close figure, 22,000 Tons,in private Indians hands.
Counterparty risk. Believe in it, or not.
Get your spreadsheet out and devalue $100 by a constant 5% per year.
Now take the devalued dollars and calculate how many of them it would take to buy 1 ounce of a fixed commodity like gold. It looks like the price is increasing exponentially when in fact it's the value of the currency which is decreasing exponentially.
The simple truth is relativity. Because everyone is decreasing at the same rate it looks like everything else is increasing. When you get on a descending elevator are you going down or is the ground coming up to meet you?
Gold is dangerous too! It is very expensive and who says it will ever have a blow off bubble like LT bonds??? Gold is immediately vunerable to profit taking as the finacial cliff looms and economies slow. Perhaps then and only then a long should be put in place.
True. What would Greece do right now if its government was sitting on 200 tons of gold in some vault? Governments will dump their assets to keep from collapsing.
Gold is not expensive. Your dollars are worth shit. China is dumping, Iran is selling oil for gold. Watch your greenback.
Huh? 45 years ago it took only 1 paper dollar to buy or exchange for a silver dollar. Today? It takes almost forty!!...that right 40...
Silver has not changed.. The coin from 45 years ago is the same ..its the illusion that has changed..
The illusion being that paper is worth anything but the paper its printed on.
Whats the friggin difference between a 1, 5, 10, 29, 50,100 dollar bill?
INK! And faith and belief...well theres a lie in that belief...
There is no bond market, there is only the bernank.
Gold is the ultimate un-bubble.
I have never really subscribed to valuing gold on a currency basis but rather on the basis of its relative value to real things whether they be oil, houses, wheat etc.
The second point is that gold will never have a residual value of zero under ANY circumstances which is a lot more than can be said of fiat currencies and debt instruments such as government bonds.
More gold counterfeiting stories will go viral again. Why? Fear to convert those who will not comply to special interests groups goals.
Global Banking 2020
Ambit Bank of the Future| 2009 sticky wicket video about future
We have the past to gage the future
Future of Banking Industry
Next, we have the future to gage the past
The Future of Retail Banking
A glimpse into the future to see how your individual thoughts will be controlled..
Future Technology--- Watch your day in 2020
Buy your tablet and conform muppets..
I find it mildly amusing that people don't look at bond prices at all, only the yield.
The yield acts as a lever.
Lets say a 10 year $1000 face value bond with 5% coupon is trading at a yield of 1.6%... What is the market price of the bond?
So there is a large potential for capital loss on bonds with low yields should interest rates rise even modestly.
I find it mildly amusing that people forget what happened to GM bond holders.
One of the reasons I am here is that I am learning about the fundamentals of gold, and I have a question. We are right now facing a severe food shortage around the world. We don't how bad it will be, but let's say that next year is really, really bad. More droughts, more floods, etc., and China has people literally starving to death. Riots are breaking out all around the world. My question: will the governments sell their gold to feed their people in this scenario?
No question, food, water, gasoline and ammo will be in much higher demand than gold in your scenario. You're talking about a complete breakdown, but what happens if we just have a run of the mill hyperinflation scenario?
Gold and silver holders will be reported handsomely.
hahaha! At first I read that as "rewarded".
So they need gold to buy food and fuel? They don't need to sell anything to trade for the paper they print.
The usual scenario is they go to war.
Will believe the bond market bubble is about to burst when I actually see it. Can't believe it hasn't burst already. OTOH, the same can be said for the coming mania in gold, can't believe it hasn't already started.
JMHO - but neither is likely to happen as long as the USD is the world's reserve currency. As long as the rest of the world and US citizen's for that matter, continue to accept US toilet paper for real goods and assets, interest rates can and will remain low and gold has and will be kept from experiencing any kind of mania.
: "but neither is likely to happen as long as the USD is the world's reserve currency"
That is a good point because as long as OPEC continues to sell their oil for FRNs, the dollar will have a global demand and remain the word's reserve currency. How long this plays out is anybody's guess, but one thing is for sure: we are fighting wars in the Middle East to make sure OPEC doesn't jump ship and start selling their oil for other currencies, or gold for that matter.
Mr. Hudson
Should be interesting in the next several years, Technically the USD became a fiat currency in 1971. If I'm not mistaken the avg. life of a fiat currency is 40-50 years, we are right in the wheelhouse.
What ever the outcome, we here in the US can pretty much plan on a reduction in our standard of living.
If you watched the video,it was clearly stated that the mid east central banks are loading
up on gold as well as the Chinese.Doesn't sound like a vote of confidence in the petrodollar.
The house of Saud is very vulnerable at the moment.
Anything could happen very quickly.10,000 princes fighting over the succession ,without
the many other internal/external problems.Russia and China have drawn a line in the sand
against the US in the mid east.Iran refuses to be goaded, and then theres Pakistan.The nuker in
the woodpile.
Reserve currency status is transitory.Tick tock......
I believe you're probably right, as is the video. I've actually thought the House of Saud has been vulnerable for quite a few years now. They seem to spread the oil money to the population just enough to keep them happy. If that is to change for ANY reason, they are toast.
There's so much going on over there. I want to see if Russia has really drawn a line in the sand in Syria. It seems like the US may be pushing Turkey to test that line. I want to see the Chinese reaction to strategic strikes by the Israelis on Iran.
Agree. Reserve currency status is threatened. Question. The Chinese have done currency swaps with the BRICS and other Asian nations, i.e. Japan (which I find odd). Will it be enough?
I've always thought that the country that decides to back their currency with gold or silver first will rule the economic world. Why haven't the Chinese or Russians done that yet?
Just waiting to accumulate some more gold prolly,and its on sale coutesy of the FedRes manipulation
thru proxies.
Also it takes time to set an alternate to the SWIFT system ,its been in process since May this year.
I think the Chinese and Russians may yet surprise everybody with a gold backed Ruan(ruble/yuan).
I was expecting a loud response , and screaming about Qeternity because of their warnings against it
a priori.Really strange.Usually when the complaining stops, a sucker punch normally follows.
Does anyone knowif the Russians sent their most advanced S-A missle system to Iran?
Is it the S300 or S600? Anyway, if they supplied Iran with their super system, ECM or not, Israeli losses will be pretty high. However, one does not relish the Russians or the Chicoms to have total military superiority, dollar or no dollar. Then we would be under their power here in the West.
Gold wants to be in larger lumps, it is ambitious that way.
>>' The Governments dont rule the world, Goldman Sacks rules the world '
Crash Imminent - http://www.youtube.com/watch?v=K8-9er-5fPM
Rastani Shorts? I think that I see your point:
If one has access to essentially free US bitz and bytes, it is in their interest to maintain the purchasing power of that largesse by crashing assets valued in them every once in awhile, and subsequently carpet bagging the shit out of everyone who is not in a position of such exorbitant privilege. Rinse repeat. Have I got it?
The diminishing timeframe for the snapback of real assets following a manufactured crash is worthy of consideration though.
Consider that Mr. Rastani has been 'dreaming of this every night for three years' too; that's had to have left a mark.
Nice to see you're still around, btw.
Good to see you guys. Thanks for the vid Rusty.
How old is that video?
The book is "Extraordinary Popular Delusions and the Madness of Crowds" by Charles Mackay
Should zerohedge ever have required reading prior to a first post, this is it.
Ah Ah, LawofPhysics where are you??, I am short treasuries since May getting a couple of times....And stack up with PMs...
Is there any fool long treasuries in that blog?
Seems like the logical move. I tried shorting treasuries via TBT a year ago and got crushed. It may be that now is a better time. It just seems that if the SM decides to correct, money jumps back into treasuries. The SM may be heading toward a pretty good correction. JMHO
You have to calculate how much pain you are ready to endure and have a hedging asset like a tobacco company with fat dvd which will track interest rates as they move down and reprice inflation and increases dvd on the other hand. In the last 10 years if you were short Japanese gov bond long Japan tobacco you would have made money, as interest rates went down but Japan tobacco had to go up faster in price because of relative larger yield. Tobacco companies are "super gov bonds" if you will. They do not decrease dvd in deflation (actually inca a bit) yet benefit from expanded multiples. On the other hand in inflation scenario dvd increases nominally, in inflation p/e of tobacco co compresses but you are protected with your gov bond short.
Libor-ois, spain, Money market over Fed funds, fear on stocks, ILBE inflation expectations...
I think the perfect moment to max out on short is when a EUR country exits EURO, you go full on your max allocation short Treasuries, because you will have the max jnee-jerk rally. If euro holds together tge to of treasuries is behind us already...
Compared with hyperinflated dollars or "normal" dollars?
I think back to the number of times I said to myself, "I couldn't afford to purchase my house if I didn't already own it"
I wish I had listened to myself more closely.
The sine qua non of bubbles is E-Z-Credit. Housing is still in its Bubble Phase since zero down loans are still very prevalent. There will be no stabilization of house prices until some discipline is restored and the zero down mania is abolished.
This is a very good video, and I agree with almost everything. However, I have one huge question about how the collapse of government debt instruments plays out. It may be very different than described in the video.
At some point in the next 2 or 3 years, I expect the federal reserve will purchase [essentially] 100% of all [medium and long term] US debt. Since they create the funds to purchase that debt out of thin air at zero cost, they can continue to pay low interest rates no matter how much the federal government borrows. And indeed, they essentially must do this, because the federal government literally could not pay substantially higher interest rates without spending all tax revenues on debt payments.
If my assumptions above are true, nominal interest rates on US government debt will not explode higher as predicted in the video.
What will happen, however, is a collapse in the value of the dollar. Therefore, if the collapse in the value of the dollar is factored in, the effective interest rate (factoring in loss of dollar value) would explode higher. But it would not mean nominal interest rates rise substantially.
Which means, "TBT investors beware", because TBT is based upon nominal interest rates, not honest/effective interest rates.
The argument for gold in the video seems entirely valid.
You make a good point Ann. Thing is what will the dollar devalue against?
The G20 are acting together (as long as there is not a falling out). If the dollar falls out of line the G20 central banks will buy dollars. Therefor all G20 currencies will devalue against gold.
Correction: When the value of the dollar collapses, the effective interest rate (factoring in loss of dollar value) collapses to a large NEGATIVE number (because people will get back far less in value than what they paid for the original bond). Which means bonds will absolutely SUCK as investments, yet TBT won't go up. Totally absurd when you think about it.
Isn't Gold as usefulas a Tulip bulb? I would suggest that Gold is on the right hand side of that bubble chart and not the left....What good is Gold to a Government whose people may be starving and rioting? Wouldn't they be more likely to sell it to buy Food and fuel?
You say people will buy food and fuel with gold and then ask what good is it? What good is money?
The key it seems, is Au will selll off at a super high, like tulip bulbs. That's when we sell 90% of our Au and other PMs.
The other 10% you are holding will then come back to a more higher, stable value after the bottom. Seems like that is what the guy is saying. I started reading this yesterday, and have watched it several times. I think ZHers can be in a position to make a bundle if we can figure out from past bubbles how to recognize the top of the Au bubble.
I am still ciphering on this. Excellent presentation.
Speaking of bubbles, the bubble that most of the world is not aware of is Real Estate in India. A house in Delhi that cost around $50,000 in the 1970's now sells for $10 million dollars or more. Farmland too has increased in price exponentially (not necessarily in value) because of US / UK Hedge funds buying up a lot of prime agricultural land and driving up prices to multiples of income for locals that are in the 1000's. The bubble there is far greater than any in the developed world including the RE bubble in Canada and Australia at present.
The agenda of buying up prime farmland, and letting it sit idle using money that comes from the World Bank (actually funneled through the World Bank but provided by the FED, the ECB and other CB's) is an agenda of genocide which is evident by the rapidly increasing starvation in Africa and ever increasing farmer suicides in India.
Depopoulation agenda of the World Bank: Land sold off and used for biofuels could have fed 1 billion peopleInteresting, can you share some links on Indian RE bubble?
Just basing it on anecdotal evidence. My father built a house in the early 70's for $8000, which today sells for $8 million, figures in US$. The exchange rate at that time was roughly 5 rupees to 1 US$, now it is 55 rupees to 1$. So there has been massive currency devaluation in India, but that alone does not explain the 1000 fold increase in price, it is a bubble that makes the US RE bubble look like deflated balloon.
India is facing inflation because it is swimming upstream trying to keep its currency from falling much more; without the RBI's (Reserve Bank of India) massive interventions, the rupee would exchange at around 100 to $1. This is the reaosn why the Govt. allows the raping of its people by allowing predatory foreign corporations to buy up everything, including the farmland that people depend on for their subsistence; the Govt. needs more US $s. Walmart is desperately trying to get free and unfettered access to their markets. Problem is that with 800 million destitute people that cannot be fed with the Walmart / Monsanto model, there will be widespread rioting (already happening on a small scale), and and eventutal revolution or civil war. Martial law may be declared but is highy unlikely that it can be enforced in a tribal country.
P.S. Too bad my father didn't keep the house, would have been a good time to cash out now!
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