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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VonManstein's picture

Gold not looking to hot at this moment. Ill be damned if i know why. New normal is QE = sell gold. OKie dokkie

kliguy38's picture

No worries unless you're a paper trader of gold.......The game is physical accumulation and preparation for some bunghole pain for the uninformed peeps when they realize the fiat game is a fraud. gl to those that believe a stick save is still out there.

VonManstein's picture

Not worried and i dont have stops for this very reason. Cost av is very low.

Its funny more than anything right after Benny does his thing. Perhaps its a paper short to get cheapr Phyz on the london open.. Who knows who cares

TrulyBelieving's picture

Benny speaks, then to show how in control he is next thing to do is crash gold.  Not the first time it's happened. 

tallen's picture

Gold just dropped $7 on no news again. Market has gone full retard.

*Oh wait I forgot, it's been full retard for years now.

The Shootist's picture

Yeah, silver too. What the fucks up with that? I want out of this rigged system dammnit! Somebody let me out, I'm taking my gold and silver with me.

GetZeeGold's picture



Welcome to the whipsaw market.....get used to it.

Hapa's picture

can't really get up about it


its day will come

trav777's picture


The Shootist's picture

Or one could say that "steady supply and demand silver" went down 1.64% in free fall on no news. Or, down after QE 3 and on the evening of QE 4's announcement. It's what I call a cabal smackdown.

nope-1004's picture

The criminal activity on the COMEX, LBMA, and thinly traded after markets are so obvious.  You'd have to intentionally look the other way to not see the overt criminal activity by JPM, which is what the CFTC did and continues to do.  What Chilton has said and what continues to occur are two different things, therefore, Chilton is FOS.


razorthin's picture

Consider it a gift if you are stacking.  You gotta dance while the music's still playing.

akak's picture



That's right --- and so that automatically makes everyone who owns gold (no matter at what price they bought it) a "bagholder", right Trav?

Jendrzejczyk's picture

It is fucking funny to see you back.

Let's hear "The Story of the Leaving and Grand Return".

MsCreant's picture

I second this request. (Hey Jendrzejczyk, nice to see you too).

Jendrzejczyk's picture

Always a pleasure to see you too Missy.


F. Bastiat's picture

It's close to breaking. The coins delivered today are 2010 or newer for silver and 2012 for Au. Just refined - which means there really isn't anything in storage.

A network of retail consumers can absolutely break the fiat nonsense over time. But it takes persistence and physical accumulation. We're close.

Jungle Jim's picture

Yeah, I noticed that. More than $7, when I last looked. It plunged well below $1700 in the twinkling of an eye. Curiouser and curiouser.

Of course, my stack is still shiny. It's just suddenly worth a LOT less if I need to sell some of it to live.

I already sold my car, last week. If you want to call it "selling." It was more like I just gave it back to the car dealership for what I still owed on it.

Other than a couple of guns and a few other personal items that might, with luck, raise a few hundred dollars if pawned, and my Dad's uninhabitable house (which the state will soon force me to sell to pay Dad's nursing home bill anyway), I'm down to my PM stack. I can't wait a couple of decades.

ZeroAvatar's picture

WHOA!  Tyler's predicted months ago that we would start seeing more and more used car inventory on the lots as subprime borrowers purchased and then had their cars repo'd. 


You 'gave it back to the car dealership for what I still owed on it'.  And so it begins.

Jungle Jim's picture

It didn't get repo'd. I bought it new in July, 2009. It was a 2009 -- the first new car I ever bought. I made a down payment of over thirty percent of the car's sticker price. I mean I just wrote them a check for $7,000.

 I don't know what you mean about "subprime borrowers," or if that ever applied to me at all in any way.

On the day I bought it there was a lot of razzle-dazzle and sleight-of-hand about "rebates" and other crap I didn't understand, which made me think I was getting a FAR better deal than I was. I soon learned differently -- that I owed a LOT more on it than I thought I was going to. 

Nevertheless, I believed I would have my first-ever new car paid for long before now. In this I was over-optimistic. As of November I still owed about $8,200 on it. I was paying Chase Auto Finance $330.26 every month. I was starting to feel this to be more of a burden, but I was still barely willing to go on paying it for a car I still thought of as in some sense new. (It had only 29,000 miles on it, and had never required any repairs beyond routine maintenance.)

A couple of months ago it started to give trouble. It would refuse to start at first. Then, when repeated attempts succeeded in starting it, the motor would go stone-dead in traffic, unpredictably.

On Friday, November 30 it went dead in heavy traffic in another town thirty miles from home. I managed to get it out of the road, but, unlike every other time before, this time it could not be restarted. 

I had to have it towed in to the dealership I'd bought it from, and sadly left it there, to be put in their shop come Monday morning. It turned out the computer had gone bad. The whole computer had to be replaced. That was still covered under warranty, though some other issues were not.

 But the whole experience -- dying suddenly in the middle of fast traffic (which might have gotten me killed), having it towed, and -- for me, worst of all -- having a bunch of grease monkeys in it, leaving black smudgy handprints all over the interior, oily stains on the upholstery and safety belts, and something sticky on the steering wheel -- just flat took the "new" right off the thing for me.

 So I no longer felt I was getting what I was paying $330.26 a  month for -- a new, in a way "unspoiled" car. It wasn't worth $330.26 a month to me anymore. The day they told me they had it fixed, I told them: "I don't like this car anymore. I don't want it anymore. I want it out of my life."

 They allowed it a value of about $8,500. I owed about $8,200 on it, plus the $144 repair bill I owed the shop. I never even sat in it again. I got my stuff out of it and I left them the car and they wrote me a check for the difference. And that was the end of that.

I DO still have an old, fully paid-for "beater" that still runs, sort of, for now. It might be  worth $3,500. And my PM stack, which would actually be worth a respectable amount of money if not for the ongoing, never-ending price-suppression.


flattrader's picture

Sorry to hear of your troubles.  Sounds like you got out of it pretty clean.

>>>It turned out the computer had gone bad. The whole computer had to be replaced. That was still covered under warranty, though some other issues were not.<<<

Please tell us the make and model.

[ I heard another story like this recently. ]

Papasmurf's picture

I bought my 1982 Dodge brand new from the dealer.  In my youth, I thought Chrysler deserved a break during that recession since Lee Iaccoca was willing to work for a buck a year.  I now know I was wrong; they deserved to fail in 1982.  A better company would have emerged from the ashes.  The 1982 Chrysler rescue formed the government bail-out model used today.    

As delived, with the fifty-eight point delivery checklist completed and signed, the truck was delivered a quart low of oil and with oil dripping onto the pavement.  Check oil level was on that checklist.  So was check for leaks.  On the trip home from buying it, I tapped on the horn.  The plastic button cover fell off onto the floor, it's plastic retainers cracked.

I took it back the next day for replacement of the leaking rear main seal.  They declined to replace the plastic horn button because pushing it hard was "abuse".  I refused to buy a new one for cash - the truck still has no horn button.  Why spend $15 on plastic crap that will break again?  The shop replaced the rear main seal and returned the vehicle a quart low of oil.  They billed Chrysler for five quarts under warranty, an amount that would have brought it to the full mark.  They lost the clutch cover and asked me to return in a few days while they ordered one.  A few days later, they had still not obtained a replacment clutch cover.  I instructed them to take one from the many unsold trucks in their stuffed channel.  They had plenty on the lot.

The horn had stopped working because of a loose connector under the hood.  Every time you closed the hood, this connector would fall off.  I left that disconnected to have them replace the loose connector.  It was fairly obvious when you slide the connecter onto the horn terminal that there was no retention force.  I had already replugged it several times and had it come back apart several times.  The dealer plugged it back in, barely staying on, and they billed Chrysler for a turn signal switch assembly.  Nevermind you don't touch the turn signal switch to repair the horn circuit.  I asked to see the old turn signal switch. They said they had already returned it to Chrysler.  

I contacted Chrysler regional about other problems with the truck.  During that conversation, I asked them what they thought about their dealer billing Chrysler Corporation for things such as oil, turn signal switches and so forth as warranty repairs when they had not actually performed the service.  Chrysler told me "that was none of my business".

Later, the right rear wheel would lock up while stopping on wet pavement.  The right side brake was overly aggressive.  The dealer "fixed" this several times by replacing the brake lining.  Each time, they said the lining was glazed but couldn't explain why this always effected only the right side.  The problem always returned in a few weeks.  Eventually, I fixed it myself by repairing the leaking brake cylinder that was contaminating the brakeshoes.

I didn't whimper and bring the truck back to sell it to them for a fraction of what I paid.  I kept that #oddamn truck.  I still have it today and use it.  That is my way of thanking the auto industry for their attendance to me as a customer.  I never became their customer again.  Oh, that dealer is gone now.  I wonder why? 

I haven't bought a new car from a new car dealer - any dealer since.  I buy cars used from private partys and I fix the things they couldn't get done by the dealer. I haven't had a car payment in twenty-five years.  That feels so much better than riding around with no money in my pocket in a blemished new car that I'm angry and disappointed about.

Recently my 1996 worth a $1,000 bucks crapped the transmission.  The A4XN transmission is known to be a POS and I did well getting 125K miles on the original.  I briefly looked at new Ford Fusions in the $25,000+ price range. Then I started thinking about how angry and self-consumed I would become if my expensive new car was delivered with an engine defect and sweaty mechanics end up taking apart the engine in my virgin new car.  I put the '96 in a transmission shop, and $3,500 later my $1,000 beater is running like a top.  The shop applied upgrades that correct the abberant shifting this transmission is known for.  At the same time, the shop fixed more stuff I put on the list.  The worn or failing parts that are removed during part of the transmission repair, they replaced for the cost of the parts.  A dealership would have toted up flat rate for a transmission mount replacement, transmission rebuild, engine rear main seal replacement, oil pan gasket etc and run that tab beyond $5K.  This firm valued my business and I will go back if I need transmission service again. 

Bank of America loaned me $3,500 cash for fifteen days on this epair. I paid in full with no interest payment.  They lend me money every month at no cost.  It feels great to ride around in the old beater with a seat that conforms to my ass.  The knobs and buttons are easy to use compared to todays unrepairable crap where a Microsoft touch screen computer masquarades as all the car's controls.

Most of the greasy hand prints in the car, oil stains on the seatbelt and so forth are my own from changing oil, brakes and so forth.  If the transmission shop added one or two, I hardly noticed. The best thing about it all is I am not angry, disappointed or self-absorbed about the financial mistake of buying an overly costly imperfect new car.  It's pretty much a crap shoot to get a good one. 

Most importantly, I remain debt-free.



IrritableBowels's picture

So the car was approximately $22K when new.  You've had it for 3.5 years and put 29K miles on it and they booked it at $8500?! 

That's some serious devaluation!

I drive a beater, too-a Buick.  Love the 3.8L (changing the waterpump was a HUGE bitch) and it feels like I'm driving a couch.  It gets me where I need to go comfortably and in the same amount of time as my co-worker's 2012 lifted crew cab Chevy 3/4 ton.  Wouldn't mind a mid-90's T100.

Northern Lights's picture

You know, I understand where you guys are coming from with the cars.  First car I bought was a used 1990 5.0L Mustang.  No serious issues with this car.  I wanted one since I was a kid in high school.  Out some money into it with a new paint job and replaced most of the suspension and a new set of tires and exhaust.  Had the car for 8 years.  Was a great summer car.  Would have kept the car until the wheels fell of if it weren't for the Province of Ontario's Governmental interference with their smog test program.  Pretty much impossible to pass when you're driving a car that's 12 years old (bought it in 2001), and was built during a period when these things weren't passing their own smog limits when they were brand new!!!  I got tired of the run around of finding someone to finely tune it to pass it or conditionally pass it.  After 8 years of ownership, I reluctantly sold it.  I had it set up it could have ran another 8.  Talk about "recycling", I was more an environmentalist than anyone driving a brand new car every 3 years seeing as the most pollution caused by any vehicle will never surpass the amount made to build the fucking thing.  Hypocrite government.

AllWorkedUp's picture

Yep. Maybe that's why more mush for brains fund managers aren't in it. They know it's manipulated like nothing else on the planet and unlike us hardcore holders, they can't handle the heat and don't want to fight the Fed.

 Seriously, we just heard today that QE to infinity is on the table and these fucksticks are taking it down in the overnights, really? Who else besides us puts up with this shit? It's been correcting in a range bound manner for 15 months since the last high. 80% of the time it's down during the day.

 No wonder I'm so pissed off all the time. I hope this pays off in the next few years because this shit is really old.

Jungle Jim's picture

I don't have a few years for this to start paying off. I needed it to pay off last year. I'm going under now.

AllWorkedUp's picture

Jim - hang in there. I wish I could tell you we're going straight back up tommorrow but I've seen this too many times to say that. One day at a time. GL

GeezerGeek's picture

It should be obvious: they had to react to this article's appearance on ZH.

San Diego Gold Bug's picture

Long term folks!  Who cares if it goes down $7 in  a minute in Asia....this is a long term hold for most here.  If you are a trader like myself, buy this dip and sell tomorrow morning (PST) around 5:30am.  Should be good for $5-$15 tonight.  This is almost like clock work most weeks.

Keep Stackin'

Jungle Jim's picture

I care.  don't trade paper. ALL my PMs are physical. It takes serious time and big, multi-layered headaches to liquidate physical. The only dealer I know and trust enough to buy from is in another city. I have to go there in person to buy or sell. I don't do any business online anymore.

Anasteus's picture

It has nothing to do with market. It seems that a frontal attack has been launched against gold & silver. The cartel is either getting nervous in desperate hopes to keep the status quo afloat at all costs, particularly now, when its unsustainability becomes more and more evident, or they are trying hard to keep prices lower for bank & hedge accumulation purposes as long as it takes.., or both. They seem to be pretty hurry; they don't even bother with pretending the price should follow some fundamentals. The dip is an unscrupulous manifestation of an outright manipulation during moments that are historically confirmed as being the most bullish for gold. Clear to me.

This way or another, an opportunity for bargain hunting unless it's too late. The fact that gold requires such incessant attention and intervention just demonstrates how valuable it is.

Kastorsky's picture

gold bugs don't give a shit.

they have achieved nirvana

Caviar Emptor's picture

Ask yourself: Will they screw it all up? Can they maintain 'con-fidence and credibility? You know the answer

ball-and-chain's picture

Gold Smold.

I'm investing in ammo and canned chili.

I'm also gonna buy me one of them there school buses I can live in.

I'm getting ready for the apocalypse.

Peace and love.

spinone's picture

I went to your blog and read it.  Its the absolute worst blog I have ever read on the internet.  It would be funny if you did it as a joke, but I can tell you're serious.  You actually describe each day what you ate and watched on TV.  What drivel.

MsCreant's picture

Thanks for looking so I don't have to.

Jendrzejczyk's picture

Well worth the price of admission.

"I walked ten miles today through the rice paddies.  Then I ate pumpkin pie and drank Dr. Pepper."

akak's picture

Dammit, now you made ME do it!


Yesterday, the Dragon Lady served chili for dinner.  It came out of a can.  But I didn't complain.  I smiled and ate my vittles.  I'm marvelous that way.

The Factor came on. I can't remember a darn thing O'Reilly said.  That happens to me sometimes.  I just forget.  Perhaps I have Alzheimer's.

I watched the new Total Recall.  I absolutely hated the film.  The first one with Arnold S. was so darn good.  Classic.  How you screw up a Philip K. Dick story is beyond me.

I prayed to the Christ God on bended knees.  No big surprise.  It's not like I'm some filthy atheist or misguided nihilist.  Jesus is the living king.

I went to sleep at 9 p.m.  I didn't dream.  I woke up at 5 a.m. and drank coffee.

I read the newspaper.  New England laid a beating on Houston.  The Superbowl will feature the Broncos and Packers.  But what do I know?

The Five talked about the mess in Michigan.  Governor Snyder made Michigan a right-to-work state.  I like unions.  They protect workers from becoming slaves.  Perhaps I'm a misguided socialist.  Anything is possible.


Hard to get past the banality, but there is a certain Zen-like quality to it, I have to say.

MeelionDollerBogus's picture

It's what happens when Forrest Gump DOESN'T summarize down to "life is like a box of chocolates"

Old Earth Chaos's picture

He sounds like a "misguided nihilist" to me.

MrButtoMcFarty's picture

Is this the Jim Bakker diary?

Ham-bone's picture

Spinone - thanks for the laugh but not sure if the blog or the fact you took the time to read it is funnier.

takeaction's picture

spinone...thank you so much for making me click that.  Are you f'ing kidding me?  "Worst Blog" doesn't even come close to describing this crap.  To be proud and post that shit on a financial website...really?  You are proud of that?  Wow.  Traffic spike far 7 reads...wooohoooo....

Pareto's picture

I can't find my bug-out bag!  Fuck!!

Taffy Lewis's picture

It's great to see you back blogging, ball-and-chain. I won't blow your cover. It seems that you are lightening up on the cigs and booze, and getting more exercise? Take care.

scatterbrains's picture

gold hitting the promethazine again

e_u_r_o's picture

heres hoping for a dip to buy!