• Monetary Metals
    05/02/2016 - 01:28
    The price of gold shot up this week, and silver moved proportionally. Headlines are screaming for gold to hit $10,000 or $50,000. Does this alleged new bull market have legs?

$10,000 Gold And 'Monetary' Roots: From Kunta Kinte To Keynes

Tyler Durden's picture




 

The saga of an American family centered around Kunta Kinte's roller-coaster life through freedom and slavery made Santiago Capital's Brent Johnson reflect on just how critical 'roots' are in many aspects of our lives. From anthropology and linguistics to the root of law in the US Constitution and Bill of Rights, Johnson extends the analogy to precious metal derivatives exchanges rooted in trust and explains that money is not the root of all evil. While his political taunts and Keynesian antagonism is well worth the price of admission, it is the discussion of the 'manipulation and debasement of money' as the root of all evil that is key as the manager explains gold's centuries long avoidance of this Lenin- or Keynes-inspired comprehension of how governments can "confiscate wealth" and by a "process of inflation... can overturn the existing basis of society." Gold provides the roots or solid base on which economies have grown (or individuals stored value) for all of recorded history. His conclusion is key - a tree (currency) with no roots simply cannot stand for long and the market will eventually come to the same conclusion it has for the last 5000 years as the OTC derivative bubble implodes. 

 

3:00 Precious Metal Derivatives

3:20 Money

4:10 Root of Today's Economic Problems

4:50 Lenin and Keynes

5:10 Monetary Roots

6:30 Why Is This Important for Gold

7:30 How much will be needed -

  • To back just 25% of the US Dollar, Gold would need to rise 50% in price
  • To back 100% of the US Dollar, Gold would need to be over $10,000.

9:10 What would a military conflict do to the price of gold?

Always remember Gandhi's dying words of the 'roots of violence' - "wealth without work, pleasure without conscience, commerce without morality, science without humanity, worship without sacrifice, and politics without principles."


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Wed, 01/09/2013 - 19:25 | 3138811 Squishi
Squishi's picture

I knew 

Kunta Kinte 

would come in handy...

Wed, 01/09/2013 - 19:57 | 3138920 A Nanny Moose
A Nanny Moose's picture

Your name is Toby

Wed, 01/09/2013 - 20:08 | 3138953 jeff314
jeff314's picture

what's your name boy...

Wed, 01/09/2013 - 20:24 | 3139012 trav777
trav777's picture

kunta kinte never existed, the story was plagiarized

Wed, 01/09/2013 - 21:22 | 3139229 Western
Western's picture

Hey Trav, remember you told me in Weimar germany gold rose more than silver because it was easier to sneak around, less bulky...?

 

lol

Thu, 01/10/2013 - 03:49 | 3139988 akak
akak's picture

Trav was born a poor black child ....

Thu, 01/10/2013 - 04:31 | 3140018 Gavrikon
Gavrikon's picture

Maybe, but he is absolutely correct about "Roots."  There was no Kunte Kinte, Alex Haley ripped off the work of a white writer called "The African."

 

Wed, 01/09/2013 - 20:55 | 3139112 Oldballplayer
Oldballplayer's picture

Kizzy...fetch me some water...

Thu, 01/10/2013 - 01:04 | 3139809 ball-and-chain
ball-and-chain's picture

I loved Roots.

It was a popular mini-series back when I was a kid.

My favorite character was Chicken George.

I also liked Driving Miss Daisy.

http://www.angrysinner.blogspot.kr/2013/01/wednesday.html

Wed, 01/09/2013 - 19:34 | 3138822 mayhem_korner
mayhem_korner's picture

 

 

Gold is the Methuselah of money.

(Edit: Tyler - you might run one of your Google search queries to see if there's an uptick on "Kunta Kinte" searches...)

Thu, 01/10/2013 - 02:30 | 3139937 zhandax
zhandax's picture

Why the down arrows?  It's the form of money that has been around the longest. How did you interpret the comparison?

Wed, 01/09/2013 - 19:35 | 3138844 JohnGaltsChild
JohnGaltsChild's picture

Hakuna Matata!

 

Wed, 01/09/2013 - 19:38 | 3138859 Snakeeyes
Snakeeyes's picture

Zimbabwe Ben and his Flying Monkeys.

No inflation, but commodities soaring over past 6 months.

http://confoundedinterest.wordpress.com/2012/12/31/no-inflation-housing-...

Wed, 01/09/2013 - 19:46 | 3138887 kito
kito's picture

10,000 gold means a 21 dollar carton of eggs..............

Wed, 01/09/2013 - 19:53 | 3138907 Haole
Haole's picture

Complete and utter fallacy.

 

 

Wed, 01/09/2013 - 19:55 | 3138913 kito
kito's picture

really???? you buy into the idea that gold soar without a currency crisis???  sorry to say, gold, at best, will preserve what you have...which isnt bad.......but id rather be the one raising the chickens and selling the eggs...............

Wed, 01/09/2013 - 20:25 | 3139019 trav777
trav777's picture

yep. 

Some wiggle room included for production declines

Wed, 01/09/2013 - 20:37 | 3139050 fonzannoon
fonzannoon's picture

I don't know why Kito's comment always gets junked. Gold at 10k/oz would be the byproduct of a seriously collapsing dollar.

Wed, 01/09/2013 - 20:49 | 3139093 Quinvarius
Quinvarius's picture

The dollar does not have to do anything for gold to get to 10K.  Gold is already worth more than that.

Wed, 01/09/2013 - 21:26 | 3139246 Bay of Pigs
Bay of Pigs's picture

That is exactly correct. 

Thu, 01/10/2013 - 08:06 | 3140130 youngman
youngman's picture

If gold has to be over $10,000 to back the US Dollar.......what price does it have to be to back the Chinese Yuan???????

That is what matters in the future

Wed, 01/09/2013 - 22:16 | 3139390 DRT RD
DRT RD's picture

Gold is worth approximately $1655.00, not to be confused with what people want it to be.  

Wed, 01/09/2013 - 23:14 | 3139552 FoeHammer
FoeHammer's picture

Not a real market, not a real price bro. I'm sure there are people who would negociate for a higher price. There are plenty of private markets...

Wed, 01/09/2013 - 23:35 | 3139599 Bohm Squad
Bohm Squad's picture

People on ebay want it to be more than $1800 to $2000 per troy ounce.  There's a huge difference in your paper market quote and the real world.  Paper carries a significant discount!  :)

Thu, 01/10/2013 - 01:51 | 3139897 Dr Benway
Dr Benway's picture

You have never been to a bullion dealer, and never bought a piece of physical gold, and think you can't do that at a few percent over spot? And you argue that the "real" price of physical gold is determined by.. eBay??

lol. Some of you guys are just too much.

Thu, 01/10/2013 - 07:38 | 3140105 tocointhephrase
tocointhephrase's picture

It could also be worth zero when going by the paper price ;) And to that effect I truly hope so!

Wed, 01/09/2013 - 21:43 | 3139308 Pareto
Pareto's picture

Kito is totally correct......+/- a few eggs.  Gold will only buy, in exchange, what it has always gotten, in exchange.  Its not going to shoot to the fucking moon, and neither is silver.  The principle behind holding gold is to preserve your purchasing power of stuff.  Moreover, you don't need 100% backing of fiat in gold!  Thats asinine and is why people think a gold standard is whacked.  Fiat backed by gold is no longer fiat.  So lets forget about fiat.  Instead think of a gold back declared currency in whatever terms you like.  Fix a value in exchange, and let prices (in whatever currency you elect) move to reflect the relevant distribution of gold to currency.  Kito is right.  $10,000 gold is approximately 6 times current prices, implying $3.50 X 6, or $21/carton.  As a side bar, I have noticed that gold has tracked well with the price of arable land.  cheers.

Wed, 01/09/2013 - 23:32 | 3139587 Bohm Squad
Bohm Squad's picture

You're assuming a linear relationship will always exist in its current ratios...

If gold becomes relatively more desirable than eggs, it will rise in cost at a greater rate.  The two values cannot and should not be pegged.  The world is not that rational.

 

Thu, 01/10/2013 - 02:23 | 3139931 Pareto
Pareto's picture

Desirable relarive to what?  I mean, thats the point isn't it?  Under what circumstances does gold become more desirable than what it normally fetches in exchange?  Would we say one day, for example, that gold fetching 1 acre of arable land, would suddenly be worth 5, 10, 100?  Fiat becoming worthless does not change the exchange value of gold.  Scarcity, maybe, or properties of the metal that newly discovered offers an incremental market benefit not before realized.  However, debasing the currency would imply gold rising to infinity, and in the measure of the currency debased that would be true, it will still only fetch you about 1 acre of land.

Thu, 01/10/2013 - 04:14 | 3140001 dunce
dunce's picture

I never thought about the ratio of an oZ. of gold to an acre of land, thanks, now i have a better idea of how to judge land prices and value. my problem with owning land is property taxes can effectively be expropriating and your ownership is a public record. Historically farmers have been sharecroppers as much as owners because of demands by overlords for part of the crop or money  as taxes.

Thu, 01/10/2013 - 14:06 | 3141231 Boonie
Boonie's picture

What land?  An acre of Iowa crop land or Kentucky pasture land?  While I might consider paying $2,000/acre for 50 acres of Pike County, Illinois CRP surrounded by 150 acres of mature timberland because I love to hunt whitetails, no farmer in his right mind would pay an ounce of gold per acre for such non-productive agricultural land.  I might be making your point, because that acre of Iowa crop land is going to fetch far more than 1 ounce of gold (at today's prices) while I could buy more than 1 acre of pasture land for an ounce of gold (at today's prices) and two, maybe more, acres of my dream deer hunting land.    

Wed, 01/09/2013 - 23:33 | 3139590 calltoaccount
calltoaccount's picture

trader joe's jumbo white eggs-- $1.99 doz.

Thu, 01/10/2013 - 04:34 | 3140021 Gavrikon
Gavrikon's picture

Gold for wealth preservation, Silver for speculation.

Thu, 01/10/2013 - 09:00 | 3140178 Argentbilly
Argentbilly's picture

Gold has outpreformed inflation for 14 years, why not in the future?

Wed, 01/09/2013 - 20:33 | 3139038 I think I need ...
I think I need to buy a gun's picture

agreed thats complete bullshit, i thought u people were smarter than that

Wed, 01/09/2013 - 20:02 | 3138932 AC_Doctor
AC_Doctor's picture

Klito, that is utter rubbish.  Gold will again become real money and an oz. of Au will buy a pissload of eggs in the near future.

Wed, 01/09/2013 - 20:03 | 3138939 edwardo1
edwardo1's picture

You've got it backwards, Kito. A $21 dollar carton of eggs brings on gold revalued to something well beyond $10,000 an ounce.

Wed, 01/09/2013 - 20:39 | 3139057 fonzannoon
fonzannoon's picture

Kito's point is that gold will hold your purchasing power. I thought that is all we ever wanted it to do?

Wed, 01/09/2013 - 21:19 | 3139135 margaris
margaris's picture

No, that's just the basic expectation.

We don't mind gold yielding some bonus too.

Call it an "award" for holding on to it all those years.

And I dont mean a bonus in "dollars"... fuck the dollar.

 

Wed, 01/09/2013 - 21:37 | 3139287 ParkAveFlasher
ParkAveFlasher's picture

I'll take a par on gold when my 401k eats shit and dies, or when salaries don't keep up with costs.  That gold is in the horse latitudes right now tells me that one or both of those scenarios is playing out momentarily.

Thu, 01/10/2013 - 02:00 | 3139906 Dr Benway
Dr Benway's picture

A small proportion of PM holders here do it for capital preservation. The rest hold it for speculative purposes, have been sold some "silver at $1,000" bs, and are no better than speculators of any other kind.

Thu, 01/10/2013 - 03:54 | 3139990 akak
akak's picture

Your collective psychic power is truly astonishing, to know just what each and every poster here is and has been thinking.  Utterly remarkable.

Now, can you go pick next week's Super Lotto numbers with equal prowess?

Thu, 01/10/2013 - 04:09 | 3139995 Dr Benway
Dr Benway's picture

I actually read posters' comments, dipshit, that's how I know.

 

I realize that's a foreign concept for those of you that just reflexively downvote based on your preconceived notion of posters

 

Now have you got anything of value to contribute? Nooo? Didn't think so.

Wed, 01/09/2013 - 19:55 | 3138910 AllWorkedUp
AllWorkedUp's picture

$10,000 gold? How about we just get to $2000 this year before we get carried away? I wish I had an oz. of silver for every time I heard a pie in the sky forecast.

These criminals have it well under control, I guess until they don't.

Wed, 01/09/2013 - 22:09 | 3139371 AgAu_man
AgAu_man's picture

Agreed.  And by the time it gets to $2,000+, it means that the Elite will have bought up all the Phys. and the price won't matter if you can't get any.

Time to "get real".  As in "real-in-your-hand-gold".

IMO, that would be another way to force the paper/ETF-Gold over the cliff:  When the demand for Phys way outpaces supply, word will get around like wildfire.  Then the "naked Emperor" of paper-gold will be exposed for all to see.  His shame will be on www and MSM.  And the consequences on fiat will be very uggly.  Worse than Golden Showers.

 

Wed, 01/09/2013 - 23:37 | 3139602 Bohm Squad
Bohm Squad's picture

I'm seeing Gold Eagles selling on ebay for $2000...but most around $1800...

Thu, 01/10/2013 - 02:02 | 3139909 Dr Benway
Dr Benway's picture

You really are a fucking retard.

Thu, 01/10/2013 - 03:57 | 3139993 akak
akak's picture

Don't be so hard on yourself.

 

 

On second thought, you're right --- please continue.

Thu, 01/10/2013 - 04:08 | 3139998 Dr Benway
Dr Benway's picture

Do you actually think you are funny? This is a serious question. Did you think that comment was in the least bit witty?

 

Now go buy some Jesus Toast on eBay, someone was asking $100,000 for it, so that's what it must be worth in the "real" world.

Thu, 01/10/2013 - 04:26 | 3140006 akak
akak's picture

If my comment was lacking in wit, it was only because I felt no great need to make any more of an effort to be funny than you habitually seem to do here in trying to make an intelligent comment or argument.

You have long ago proven yourself unworthy of serious consideration or response, and frankly I do not give a damn in the least what you find funny or not.  Given your consistently insulting, idiotic, and unintelligent blathering, I feel no responsibility to treat you with any respect whatsoever.

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