• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Gold - It's Time

Tyler Durden's picture




 

Authored by Lee Quaintance and Paul Brodsky of QBAMCO,

Gold bugs can’t understand how the public can be so unaware, how highly intelligent policy makers can be so immoral, and how the mainstream media can be so incurious. We can’t understand why more men and women in the investment business haven’t joined some of the more successful ones that have come around to precious metals and have taken substantial positions in them for their funds and personal accounts. The list of high profile independent-minded investors that have come out of the proverbial closet is impressive and growing: Kyle Bass, John Paulson, David Einhorn, George Soros, Bill Gross and Paul Singer, to name only a few.

Conventional financial asset selection guidelines for professional investors are becoming increasingly uneconomic and problematic. Current macroeconomic conditions leave little doubt as to why. A zero-bound rate structure across developed economies, heavy monetary policy intervention, guaranteed negative real returns of benchmark financial assets and cash, impossible discount cash flow models,cacophonous (and economically meaningless) fiscal political wrangling diverting attention from legitimate budget arithmetic ($800 billion over ten years when we’re running $1 trillion-plus annual deficits?), dubious short and intermediate-term prospects in already-emerged emerging economies, and non-trending financial markets, all suggest something has changed.

Regardless of whether one is investing personally or as a fiduciary, conventional financial asset allocation models and procedures are obviously failing and the reason is simple: the currencies in which financial assets are denominated are gravely flawed – levered beyond reconciliation and incapable of generating positive real returns for assets denominated in them, or ongoing consumer and business confidence while the leverage is being transferred from banks to central banks, and from central banks to government balance sheets. The political/policy dimension is boxed. We think prudence demands stepping away from conventional financial asset allocation models.

Here is what matters...

Qbamco - It's Time

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Wed, 12/12/2012 - 21:04 | 3057950 nope-1004
nope-1004's picture

There is no other way to protect your wealth.  All currencies are fatally flawed, and the central banks have all obviously agreed to debase together.

Made me sick watching bernocchio today.  The constant BS about "dual mandate", pinning asset purchases to unemployment was the ultimate.  Like a friggin' banker cares about unemployment.

 

Wed, 12/12/2012 - 21:06 | 3057965 SafelyGraze
SafelyGraze's picture

at least we don't have to worry about repatriating anything

http://research.stlouisfed.org/fred2/series/BOPOGLD

 

Wed, 12/12/2012 - 21:29 | 3057990 I think I need ...
I think I need to buy a gun's picture

everything is fine

Wed, 12/12/2012 - 21:46 | 3058062 TwoShortPlanks
TwoShortPlanks's picture

http://www.youtube.com/watch?v=xSLlZh9yelk

More like another helping of hurry up and wait.

Financial Tantra anyone?

Wed, 12/12/2012 - 22:11 | 3058128 Boris Alatovkrap
Boris Alatovkrap's picture

Stupid man is save money.

Smart man is know money regime is to collapse and so buy gold.

BUT...

Super smart man is know government will confiscate gold so is make sure is controlling money supply.

Wed, 12/12/2012 - 22:16 | 3058135 SilverIsKing
SilverIsKing's picture

GOLD DON'T LIE!

Wed, 12/12/2012 - 22:46 | 3058206 Alpo for Granny
Alpo for Granny's picture

Yeah but TPTB have a gag on its mouth.

Thu, 12/13/2012 - 06:17 | 3058675 Supernova Born
Supernova Born's picture

They have China's knob in their mouth.

China has insisted with "clarity" (QE2 SSBN missile launch off Los Angeles [Oh, the witty Chinese and the delicious irony that the US "LOS ANGELES" class submarines are supposed to keep the USA safe from SSBNs!]) that they must be permitted to turn their garbage US holdings into gold or its WWIII.

Gold will remain suppressed until China has unloaded what they consider a "fair" amount of Bernanke bucks.

 

 

Thu, 12/13/2012 - 01:00 | 3058464 Doña K
Doña K's picture

Boris,

Smart man buys silver and Platinum as well as gold to hedge three ways

Thu, 12/13/2012 - 02:12 | 3058542 SafelyGraze
SafelyGraze's picture

you drill into your platinum only to discover somebody salted it with gold

http://research.stlouisfed.org/fred2/series/ID7108

 

Thu, 12/13/2012 - 12:47 | 3059795 SafelyGraze
SafelyGraze's picture

spoiler: "Export: Gold (including gold plated with platinum)"

Thu, 12/13/2012 - 09:28 | 3058854 midtowng
midtowng's picture

And yet gold is getting crushed today

Thu, 12/13/2012 - 10:55 | 3059184 gmrpeabody
gmrpeabody's picture

+100

WTF....?

Wed, 12/12/2012 - 21:17 | 3057992 GetZeeGold
GetZeeGold's picture

 

 

QE paper with public funds....buy physical with private funds.

Wed, 12/12/2012 - 22:49 | 3058130 Boris Alatovkrap
Boris Alatovkrap's picture

In Russia, Boris is line up to get QE Paper. Boris very happy when is 2-ply.

Wed, 12/12/2012 - 21:38 | 3058048 SafelyGraze
SafelyGraze's picture

http://research.stlouisfed.org/fred2/series/BOPOGLD

spoiler:

U.S. Reserve Assets Abroad: Gold (BOPOGLD) 
2012:Q2: 0.000 Billions of Dollars

Last 5 Observations
2012:Q1: 0.000
2011:Q4: 0.000
2011:Q3: 0.000
2011:Q2: 0.000

Wed, 12/12/2012 - 22:58 | 3058236 DoChenRollingBearing
DoChenRollingBearing's picture

Good hunting for great little factoid, + 1

Thu, 12/13/2012 - 04:59 | 3058631 smart girl
smart girl's picture

That looks like a totally fake chart. (this one) http://research.stlouisfed.org/fred2/series/BOPOGLD

Like a dead line somewhere random because Gold was sold, lost or stolen.

Wed, 12/12/2012 - 21:36 | 3058041 DavosSherman
DavosSherman's picture

"There is no other way to protect your wealth"

Metal(s) rock don't forget (s)ilver :-) all the best!

Wed, 12/12/2012 - 22:26 | 3058167 Cognitive Dissonance
Cognitive Dissonance's picture

Mrs Cog and I just Bought The F**king Dip (BTFD)...............again. Thank you hidden hand.

<Just keep on stacking.>

Wed, 12/12/2012 - 21:54 | 3058093 defencev
defencev's picture

It is kind of idiotic to keep repeating :Gold, Gold, Gold... Yes, Gold is money. Historically was , is and probably will be. But it does not have any intrinsic value. To give you an example: if somebody would  invent an elixir of life and would sell additional years of living, this invention would have intrinsic value. Gold is essentially useless. The use of Gold as money is a question of convenience and convention. If, for example, in case of Dollar crisis, China proclaimed that their currency is supported by Gold , the Gold would sky-rocket. If you believe in this scenario, buy Gold. Otherwise, it is kind of idiotic to try to persuade market (to talk it in)

that the Gold should go up. Only absolute idiots (which is, of course, absolute majority here), invest in this way.

Wed, 12/12/2012 - 22:04 | 3058108 akak
akak's picture

 

But it does not have any intrinsic value.  Gold is essentially useless.

To claim that gold is "useless" is to claim that money itself is useless --- after all, it is (currently) just little colored pieces of stiff paper, good for neither lighting a fire nor wiping one's ass, right?  Can I now have all of yours?

Wed, 12/12/2012 - 23:02 | 3058244 DoChenRollingBearing
DoChenRollingBearing's picture

If he gives you his gold, akak, please send me a lttle too!  Sometimes the worthless things are the BEST thinsgs!  

BRB back a sec, wanna weigh myself...:

+ 7 lbs!  Maybe 1/3 from the olloquito...  It will be ALL gone in a week, sigh....

Wed, 12/12/2012 - 22:16 | 3058132 MsCreant
MsCreant's picture

You're here. If we are such idiots, why stay?

Nothing has intrinsic value if you play it out far enough. You can define everything away. Life. Food. Air. Corporations are doing it daily to turn a buck, shitting in their own nests. It's not like they are ignorant, they have decided these things do not have intrinsic value.

You can do it for gold too, see it as having intrinsic (historical) value, or none. How about using history as a guide and see the gold thing as part of a cyclical, dialectical, process rather than a stagnant position/end game? There is going to be a time coming up where gold will be the place everyone piles onto for safety. But you are going to have to watch that one too. There will then be a time when it is not and you will want to have divested before then. I'm seeing it as a life raft for the likes of me, and a way to surf for some of you out there who can afford to load up. 

Me, I like the precious. I don't have time to think about every little up and down. I don't trust the manipulators, they don't have my interests at heart and they don't have as much control over the whole thing as they would like to think.  PMs let me go on and live my life and keep prepping and checking the news.

If you are trolling, be happy I gave you some attention.

If you are serious, you don't need to be as, er, uh, ugly about things as you have been. Just because it's fight club does not mean you need to walk in the door swinging. Bitch.

Wed, 12/12/2012 - 23:10 | 3058269 Bay of Pigs
Bay of Pigs's picture

And the always lovely Miss chops him at the knees. Nicely of course.

Wed, 12/12/2012 - 22:17 | 3058140 machinegear
machinegear's picture

Does MDB have kids?

Wed, 12/12/2012 - 22:39 | 3058188 akak
akak's picture

"Spawn" is the proper word.

Wed, 12/12/2012 - 22:25 | 3058163 boogerbently
boogerbently's picture

Sovereigns support and believe gold has value and backs currency.

When they are done buying, it ONLY helps them when the price of gold increases.

The more (fiat) value their gold has, the more "justified" their fiat is.

Wed, 12/12/2012 - 22:36 | 3058172 nope-1004
nope-1004's picture

Gold is essentially useless

When I put my $20 bill down on the table next to my gold coin, both just sit there.  I scream at them, tell them to "produce" something, but they don't.  I scream louder at the $20, saying "Buffet said you could be productive".  Both just sit there.  Darn it, anyway... but I think you're right - useless is a good word.

So what's your gripe about how one chooses to hold their wealth?  Would it be better if I traded my USD's in for black dirt, since black dirt actually can produce a vegetable?

These circular arguments about 'usefulness' are really lame.  Of course gold is useless.... whadya think?  It'll blow ya?  The key here is acknowldegment by the Fed today that:  When foreigners are shunning treasuries and the Fed needs to step in only to keep the ponzi alive, you better pay attention.  This game is getting serious.

 

 

Thu, 12/13/2012 - 05:05 | 3058647 smart girl
smart girl's picture

Buffet just bought "Oriental Traders" a catelog company for really cheap frivolous junk. http://articles.latimes.com/2012/nov/02/business/la-fi-mo-warren-buffett...

Wed, 12/12/2012 - 22:32 | 3058177 SilverRhino
SilverRhino's picture

It's only the most conductive completely corrosion resistant metal known to man .... yeah ... that's useless. 

Wed, 12/12/2012 - 23:13 | 3058272 H E D G E H O G
H E D G E H O G's picture

Agreed, and that pretty little one oz. Pamp in my safe WILL BE AROUND LONG, LONG AFTER ALL OF US ARE GONE!!!

Thu, 12/13/2012 - 00:33 | 3058417 TrulyBelieving
TrulyBelieving's picture

It is anti-corrosive(basically eternal), easily divisible, scarce,.... beautiful.  Nothing else on the planet that can better gold for money or store of wealth.

Thu, 12/13/2012 - 11:19 | 3059317 IrritableBowels
IrritableBowels's picture

Gold is from outerspace, formed from a supernova explosion.  USD is primarily cotton.  Like the tshirt you are (probably) wearing.

I mean, COME ON, haterz...

Wed, 12/12/2012 - 23:06 | 3058257 Al Gorerhythm
Al Gorerhythm's picture

Hmmmm. Much learning to do, this one has.

Wed, 12/12/2012 - 23:29 | 3058304 Stoploss
Stoploss's picture

                      .    .

                               0

 


 


Wed, 12/12/2012 - 23:41 | 3058327 Xanadu_doo
Xanadu_doo's picture

this may be the absolute most full-on retard post evar.

fuck off

Thu, 12/13/2012 - 00:06 | 3058374 DavosSherman
DavosSherman's picture

defencev: You fucking POS clueless fucking inept moron.

Thu, 12/13/2012 - 00:45 | 3058442 Mr. Magoo
Mr. Magoo's picture

It seems ironic you would call gold investing idiotic. You might want to research what has held value for over 5000 years, (hint) it is definitely not paper money

Thu, 12/13/2012 - 02:20 | 3058548 Bastiat009
Bastiat009's picture

As much as I like gold, I do not invest for the next 5000, 1000 or 100 years. My investment horizon is much shorter than that (so is my life expectancy)

Thu, 12/13/2012 - 02:29 | 3058554 akak
akak's picture

 

My investment horizon is much shorter than that (so is my life expectancy)

And so is the dollar's (at least at any value even remotely close to that of today).

Thu, 12/13/2012 - 01:49 | 3058516 Bicycles and Beer
Bicycles and Beer's picture

more concisely, you can't eat gold.

Thu, 12/13/2012 - 05:16 | 3058657 Rogue Trooper
Rogue Trooper's picture

As miscreant said in an earlier reply why not just FUCK OFF and leave.  As you say we are all idiots.

Plus it is also somewhat ironic that most of us on this site have foolishly lost our PMs in boating accidents.

 

Thu, 12/13/2012 - 09:24 | 3058842 Badabing
Badabing's picture

defencev  you piece of shit.

I guess you like working and saving while the BANK debases the hard work you accumulated.

So you have no choice but to play in the rigged casino to try to keep up with the inflation they “THE BANKS” impose on all of us working people.

Gold is what they “THE FUCKING BANKS” and you fear, you turd.

“Gold has no intrinsic value” let’s pretend that inflation is the interest.

Q: can we have lower than zero interest ZIRP?

A: only with inflation!

Wed, 12/12/2012 - 22:47 | 3058212 LongBalls
LongBalls's picture

Your exactly right. There is no othe way to protect your wealth. Ask the Chinese.

Wed, 12/12/2012 - 23:05 | 3058254 F. Bastiat
F. Bastiat's picture

Mentioned this a few days ago, but will reiterate: Gold coin stocks appear to be low because the new coins ordered come out as freshly minted 2012 coins. At least the maples do.  A few years ago, Au purchases would be fulfilled with 80s vintage coins. Today, retail orders are coming in as newly refined 2012 coins.

Similar situation for silver - maples delivered are 2010 minted. Very new.  Not much left in wholesale storage.

Wed, 12/12/2012 - 23:15 | 3058274 Chupacabra-322
Chupacabra-322's picture

The US Government in collusion with the looting Federal Reserve, is the largest money launderer on the planet, by a factor that is immeasurable. Remember. The US is the worlds Reserve Currency and the funded and unfunded debt of the US is over 200 Trillion. Every single dollar that is created out of the Alice in Wonderland Federal Reserve, is a dollar of theft from every man woman and child on this planet.The debt will never be paid. It will be money laundered away through inflation or confiscation.

In my opinion. Every single senior member of every agency and all members of the Executive should be arrested by a peoples tribunal and tried for High Treason and crimes against the people, convicted, then executed.

Thu, 12/13/2012 - 04:26 | 3058617 Nage42
Nage42's picture

Not only do they have well-reasoned justification, they are also holding a time machine... "Dec. 2013"

 

So does this mean that strong hands have to hold past Dec. 2013 at least because the end-game hasn't played out in this "back in time" report from Qa-blammo?

 

Just curious

Wed, 12/12/2012 - 21:11 | 3057960 MFLTucson
MFLTucson's picture

As long as the country has jerks like Buffett who can steal BILLIONS through poor investments that this government bails out and talks shit about real money (Gold) and this compliant media tell them how wonderful a man he is, Gold will not be owned by more people. When the collapse comes then this corrupt media will blame it on Republicans and the cycle of stupidity will turn again to mania and Gold will prevail.  That is your country folks; it is ripe for the picking if they elect a man like Obama for two terms.

Wed, 12/12/2012 - 21:18 | 3057994 I think I need ...
I think I need to buy a gun's picture

you know what the media is going to say? EVEN WARREN BUFFETT WAS WRONG SEE!!!!!!!!!!!!!!!!!!!!!!!

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