Faber To Shiller: “You Keep Your U.S. Dollars And I’ll Keep My Gold”

Tyler Durden's picture




 

From GoldCore

Faber To Shiller: “You Keep Your U.S. Dollars And I’ll Keep My Gold”

Today’s AM fix was USD 1,677.00, EUR 1,258.06, and GBP 1,059.18 per ounce.
Yesterday’s AM fix was USD 1,692.25, EUR 1,268.84, and GBP 1,066.19 per ounce.

Silver is trading at $31.92/oz, €24.05/oz and £20.26/oz. Platinum is trading at $1,692.75/oz, palladium at $718.00/oz and rhodium at $1,200/oz.


Cross Currency Table – (Bloomberg)

Gold fell $4.90 or 0.29% in New York yesterday and closed at $1,685.60/oz. Silver fell to $32.08 in Asia then rallied to a high of $32.47 in the afternoon in NY trade, but then it dropped off in the last few hours and finished with a gain of just 0.25%.

Gold edged down in most currencies on Thursday, easing off the one month high hit earlier in the week. More speculative players may be taking profits after the recent run from $1,625/oz to over $1,695/oz or 4.3%.

It is noteworthy that while gold is weaker in most currencies today it is again higher in Japanese yen as the yen has fallen sharply on the international markets due to concerns that the yen will be devalued in the coming months.

Gold in yen terms remains near record multiyear highs above 0.150 million yen per ounce. New nominal highs in yen terms above 0.2 million yen per ounce are only a matter of time (see charts). 

Bloomberg reported that Credit Suisse says gold holders may have withdrawn gold from the euro zone due to the region’s debt crisis. They noted the Bundesbank comment about capacity becoming available in its own vaults in Germany.

The World Economic Forum is into its second day in Davos, Switzerland, and with the theme of ‘Resilient Dynamism’ it appears a good time to announce or spin positive news in Europe such as a slight growth in consumer morale and confidence.  

I’m not sure what Europe the Davos attendees are living on but Ireland, Spain, Portugal and Greece’s ‘recoveries’ are bleak at best.

Spanish youth unemployment has risen again and is now nearly at 60%.

The U.S. House of Representatives passed a Republican led plan to allow the federal government to keep borrowing money through mid-May.

The borrowing and money printing party can continue a little while longer but it would be prudent to prepare for the hangover. 

Owning physical gold today is akin to drinking plenty of water and having a few pain killers to hand. When this party ends, those not owning gold are going to suffer one hell of a financial hangover.


XAU/JPY Daily, 2 Years – (Bloomberg)

“Everyone should keep gold in their portfolios” as the precious metal will be able to offer value to investors even in a worst-case scenario, said Marc Faber, the publisher of the Gloom, Boom & Doom report.

“In the worst case scenario, in the systemic failure that I expect, it would still have some value,” Faber, who is also the founder and managing director of Marc Faber Ltd., said today at an event hosted by Evli Bank Oyj in Helsinki.

Faber said his outlook was so bleak that he is “hyper bearish”. He joked that “sometimes I’m so concerned about the world I want to jump out of the window.”

He wisely said that `I advise everyone to have some gold.'

Faber said that he thought there could be a flight out of cash and overvalued bonds and into equities and gold. 

In response to a question from Yale University’s Robert Shiller querying the recommendation to hold gold, Faber said: “I’m prepared to make a bet, you keep your U.S. dollars and I’ll keep my gold, we’ll see which one goes to zero first.”


XAU/JPY Quarterly, 1971-2013 – (Bloomberg)

Shiller, who is the co-creator of the S&P/Case-Shiller index of property values, responded "I'm inclined to think gold prices after this crisis might return to a lower level. Given the low yields of the alternatives [ie, bonds], the valuation of the stock market doesn't look so bad."

Faber, whose advice has protected millions of investors in recent years, warned of a global systemic crisis possibly due to massive size of the global derivatives market which is now worth over an incredible $700 trillion.

He warned “when the system goes down,” and only plastic credit cards are left, “maybe then people will realize and go back to some gold-based system.”


What's Going To Happen To The Price Of Gold And Silver In 2013?

Join us for a webinar on Jan 30, 2013 at 1300 GMT.

?  Register now!

Join two experts - Money Week columnist, Dominc Frisby and GoldCore's Head of Research, Mark O'Byrne for a one hour webinar as they discuss the outlook for gold and silver in 2013. 

 
NEWS

Gold Seen Extending Rally as Fed Sticks With QE3 for Years - Bloomberg

Strong Silver Jewelry Sales Reported During 2012 Holiday Season – The Silver Institute

Gold drifts from 1-mth high, 'recovery' hopes dull appetite - Reuters

Currency war talk not appropriate – IMF chief economist - Reuters

COMMENTARY

The One Chart That Explains the Massive Risk of Investing in Gold & Gold Stocks – Zero Hedge

How Far Up Could Silver Go? - Minyanville

Video: undesbank's Thiele on Gold Relocation - Bloomberg

Central bankers should be brought to heel by elected parliaments – The Telegraph

For breaking news and commentary on financial markets and gold, follow us on Twitter.

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Thu, 01/24/2013 - 08:50 | 3182121 GetZeeGold
GetZeeGold's picture

 

 

Chuck Munger is on line 2.........and he sounds pissed.

Thu, 01/24/2013 - 10:27 | 3182339 The Juggernaut
The Juggernaut's picture

Gold standard now, fuckers!

Thu, 01/24/2013 - 12:58 | 3182811 xtop23
xtop23's picture

Competing currencies yes. Gold standard no.

Thu, 01/24/2013 - 11:56 | 3182637 Silver Bug
Silver Bug's picture

Marc Faber has been spot on for over a decade. This guy is a legend!

 

http://marcfabersblog.blogspot.ca/

Thu, 01/24/2013 - 08:54 | 3182123 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Marc Faber rulez bitchez!

Thu, 01/24/2013 - 09:15 | 3182158 HoofHearted
HoofHearted's picture

Faber or Shiller? Faber or Shiller?

Why would you take the one whose name admits that he is a shill?

Thu, 01/24/2013 - 09:29 | 3182183 Divided States ...
Divided States of America's picture

Wow Evli or Evil Bank....coz that name makes perfect sense.

Sat, 01/26/2013 - 00:53 | 3187341 MeelionDollerBogus
MeelionDollerBogus's picture

No, Mister (Treasury) Bond, I expect you to DIE!

http://serendipity3864.files.wordpress.com/2011/02/goldfinger2.jpg

Thu, 01/24/2013 - 10:15 | 3182305 Watauga
Watauga's picture

$700T?  Explain that number.  How can that number even be possible?  Why would anyone think it would be possible that it would not collapse in the end?

Best guess--when it happens, gold will be worth more than fiat and credit cards, but worth less than water, food, antibiotics, good land, shelter, guns, ammo, and good seeds.

Thu, 01/24/2013 - 10:54 | 3182446 InTheLandOfTheBlind
InTheLandOfTheBlind's picture

700 Trillion is a low estimate.

Thu, 01/24/2013 - 11:18 | 3182515 Big Slick
Big Slick's picture

"Why would you take the one whose name admits that he is a shill"

... and pass on the one who's name begins with the same letters as Fabulous!

Thu, 01/24/2013 - 16:07 | 3183456 cranky-old-geezer
cranky-old-geezer's picture

 

 

$700T?  Explain that number.  How can that number even be possible? 

Simple.  Derivatives are a type of insurance ...loosly speaking. 

There's no limit how much derivative "insurance" can be sold when sellers never have to worry about paying off.

It's really just an accounting gimmick to make balance sheets look better.  Underperforming assets can be "backed" with derivatives and presto, they're full value again.  For accounting purposes anyway.

Without derivatives most Wall Street balance sheets would be dripping red.  Horribly insolvent.  Derivative "insurance" makes those balance sheets look wonderful.

It's not just Wall Street.  Everybody is doing it.  State govts, county govts, city govts, school districts, water districts, and all manner of corporations of all sizes.

Derivative collapse somewhere down the road?  Nope, not gonna happen.  Two reasons: 

a) "credit events" have been outlawed more or less.  We saw that when Greece defaulted on some of their bonds.  Bondholders were forced to take steep haircuts, but no "credit event" was ever declared. 

b) Fed is now backing all $700 trillion of Wall Street derivatives.   If there ever was a "credit event", Fed would pay off those derivatives with fresh new printed currency ...or its digital equivalent, aka ctrl-p, you know, like they did with AIG, $180 billion.

Imagine what would happen if Fed suddenly had to conjure up ...oh, say... $100 trillion to pay off a bunch of Wall Street derivatives.   It would collapse the US dollar overnight.  Instant currency collapse.

Nobody should be concerned about derivative collapse.

Everybody should be concerned about currency collapse.

Thu, 01/24/2013 - 08:55 | 3182124 midtowng
midtowng's picture

Then why the Hell does gold continue to do nothing for nearly two years now?

Granted, I bought gold at $300, so I'm sitting pretty, but you would think with all this money printing that gold would continue to go up, right?

Thu, 01/24/2013 - 08:59 | 3182126 GetZeeGold
GetZeeGold's picture

 

 

What do you think they're spending all that money on?

 

Stop bitching.....most people don't have any gold.

Thu, 01/24/2013 - 09:00 | 3182131 saints51
saints51's picture

Uncle Ben and friends are still buying gold. They need more time to swap their monopoly money for gold/silver. Once that process is completed then you know what happens.

Thu, 01/24/2013 - 09:17 | 3182160 Notarocketscientist
Notarocketscientist's picture

I'll bet you all these COCKSUCKERS are using personal cash to hoard gold - Hank Paulson, Bernanke, Geitner, Barrosso, Draghi... the whole fucking lot of them.

They know fucking well what is coming - and they know there is NO stopping this collapse.

So I'd be shocked if they are not buying.

Recall all those greek COCKSUCKERS who got caught shifting Euros out of the country?

Everyone in the fucking know is hedging.

Thu, 01/24/2013 - 10:14 | 3182303 saints51
saints51's picture

I totally agree with everything you stated. It would shock the shit out of me also if they were not hedging. Its their game. We are just the pieces of the game. All you can do is read between the lines and protect your family's health and finances.

Thu, 01/24/2013 - 12:05 | 3182625 AGuy
AGuy's picture

"I'll bet you all these COCKSUCKERS are using personal cash to hoard gold - Hank Paulson, Bernanke, Geitner, Barrosso, Draghi."

I doubt it. For instance Bernanke is just clueless. If any of them had a clue they all be wearing tungsten collars... For guiltine protection. You can't spend gold if you get lynched by an angry mob. When the house of cards finanlly collapses, there is no place on Earth, or even Earth Orbit that they can hide.

Thu, 01/24/2013 - 13:04 | 3182831 Remington IV
Remington IV's picture

That group has a total IQ of 30

Thu, 01/24/2013 - 09:01 | 3182133 tip e. canoe
tip e. canoe's picture

paper smothers rock

but also don't forget

scissors cut paper

Thu, 01/24/2013 - 09:03 | 3182135 fonzannoon
fonzannoon's picture

I must be the only fkin guy on here who did not buy at $300...

Thu, 01/24/2013 - 09:08 | 3182144 youngman
youngman's picture

Me too...I think I have a filling in my tooth that I paid that price.....but I did buy a lot at 1000...1100...1200...1300....1400..1500...1600..1700..1800...still good

Thu, 01/24/2013 - 09:12 | 3182148 GubbermintWorker
GubbermintWorker's picture

Nah, I didn't get into the action until gold was $700 to $900/ounce. Sometimes it takes some of us longer to wake up. But I'm still happy.

Thu, 01/24/2013 - 09:23 | 3182177 azzhatter
azzhatter's picture

No, I didn't either

Thu, 01/24/2013 - 09:27 | 3182180 ParkAveFlasher
ParkAveFlasher's picture

1500.  Never too late. 

Thu, 01/24/2013 - 09:33 | 3182189 Papasmurf
Papasmurf's picture

I used to laugh at a fellow at work who bought a gold coin every payday.  Gold was $400/oz then, 1980-1995.  However, gold was never higher after he retired.  He died in 2002 with no profit, but he had a nice stack.

Thu, 01/24/2013 - 09:35 | 3182193 kridkrid
kridkrid's picture

I got most of mine during reconstruction... About $19... Suckers!

Thu, 01/24/2013 - 11:44 | 3182606 Big Slick
Big Slick's picture

Thanks Colonel Sanders  :)

Thu, 01/24/2013 - 10:31 | 3182348 jimijon
jimijon's picture

I am old sob. I started at around 450. Kept writing about it and even signed my emails with ... buy gold.

But heck, now is a good time than any to pick up a hundred here and there. I am partial to bullionvault but also like to own physical silver.

Now dont' get me started with losing a good deal of my real metal gains with my paper option losses. I can't ever seem to learn the lesson...just buy physical and ignore the noise.

Thu, 01/24/2013 - 11:48 | 3182616 cynicalskeptic
cynicalskeptic's picture

New option for buying silver.....

http://www.silverbulletbullion.com/?utm_source=nwtm&utm_medium=email&utm...

 

Might be worth even more if it were real ammo.  Just be warned, NWTM has a rep for SLOW delivery.

Thu, 01/24/2013 - 11:35 | 3182583 Svendblaaskaeg
Svendblaaskaeg's picture

"...only fkin guy.."

Nope, my first buy (thanks to ZH) was jun-jul 2012

Don't worry about the return on capital, worry about the return of capital

(Mark Twain quote me think)

 

Thu, 01/24/2013 - 12:32 | 3182737 AgAu_man
AgAu_man's picture

+1

I think it also bears repeating that gold is an Insurance Policy against fiat money printing, I.e. against (Fiat Money) inflation. It does not 'work' as such.

So any "profit" argument in the long run is a bit of a red herring.

I do see it as a short term, speculative "gain", if it spikes in USD/FRN money. And I strongly suspect that millionaire and billionaire gold holders like to "juice" the gold smallfry to their speculative benefits.

It is not only TPTB that are "manipulating" things. Recall the Hunt brothers.

p.s. I didn't get into PM till I started reading ZH last spring, and not crying about 400, 1000 or even 1500. I don't like to look in the rear view mirror too long or too often when driving forward. Cheers.

Thu, 01/24/2013 - 13:04 | 3182835 Remington IV
Remington IV's picture

Yep , everyone on here owns $10million of gold at $300 ... we're all geniuses

Fri, 01/25/2013 - 02:52 | 3184998 Ctrl_P
Ctrl_P's picture

I bought on the day of the peak. But no matter, I lost it all when kayaking.

Thu, 01/24/2013 - 09:12 | 3182151 BeerBrewer09
BeerBrewer09's picture

I learned early on here not to worry so much about the price of your precious metals in dollars. Worry about how many ounces you have accumulated, how much diversity you have in your metals and how safely but accessibly they are stored.

TPTB can use all the chicanary they want to manipulate sheople's thoughts, statistics, PM shorts, etc. Eventually, as we've recently seen with guns and ammo, the sheople will have no other choice but to flock to the exits (gold, silver, food, fuel, etc.) That is when you will see a parabolic shift in the value of your PMs in dollars. When everyone wants them, but none can be found for sale except for really really large amounts of FRNs and at that point, the dollar may be considered worthless when attempted to be used in exchange for a good or service.

IMHO people should be buying goods that they need now, provided they have a decent shelf life, as an investment for the future. Product sizes are shrinking, prices are rising, quality is deteriorating. Buy anything you need now. It will cost more FRNs in the future. Hoard all the PMs you can.

Thu, 01/24/2013 - 09:36 | 3182195 youngman
youngman's picture

I agree ..right now the Computer boys can affect the price....but someday they will be so overwhelmed by buyers they will not be able to play in this casino anymore.....just like guns and ammo now is spot on...you can´t buy it...its not there...

Thu, 01/24/2013 - 09:45 | 3182217 GetZeeGold
GetZeeGold's picture

 

 

Maybe the DHS will give you some.....after all, they are the government......and they are here to help.

 

They've got like millions of rounds of the crap.

Thu, 01/24/2013 - 11:55 | 3182623 Big Slick
Big Slick's picture

Youngman and Beer Brewer are spot on.  Look at the guns and ammo situation in NY State as a model for what will likely follow.  This will not be some "The Day After" event, where you either have preppers in good shape and the other half of the populace screwed.  Things happen slowly and will move out of your affordability window in piecemeal (in phases) without you really knowing it.

In NY, while the SNAP cards still flow freely, overnight you cannot buy a semi-auto AR/AK-style rifle (legally) or military ammo (too expensive).

That's a significant event! But it gets lost in the fact that the buses still run. 

You need to be vigilliant and look at these items one at a time.  Look at the different aspects of your preperation individually and assess if you are in good shape for each.  Areas where you are behind (e.g., firearms, gold, even allocation of illiquid 401k) should be assessed for urgency and acted on.  Then move on to the next area down on the list

Thu, 01/24/2013 - 12:47 | 3182772 AgAu_man
AgAu_man's picture

Yup, and... "Escape from New York", just like in the movie.

I pity the ppl on the Titanic who didn't make it into the lifeboats because the First Class fuckerks wouldn't let them in. I do not pity those, who due to their Normalcy Bias, 'discounted' the true danger and only ran when the rest of the bleating herd ran.

In Vino Veritas. And in Beerbrewer veritas. Cheers to that!

Thu, 01/24/2013 - 10:51 | 3182435 Acet
Acet's picture

Think about it this way:

- The price of something is determined by the balance between offer and demand

Right now, the price of PMs is mostly dictated by the Futures and Options markets, not the physical markets. In the Futures and Options markets, the amount of "product" on offer is only limited by how much money naked short sellers have available to use as margin. Since delivery needs not be in the actual physical PM, this means that the offer side of the equation is far, far (think 100x) larger than it could ever be on a real, physical market, so prices are pushed down due to the abundancy of supply of "paper" PMs.

Why do physical markets still follow this is beyond me: this is very much a tail wagging the dog situation. I suspect it has something to do with the biggest holders of physical gold (i.e. central banks) having a vested interest in keeping the price down.

The best option for PM stackers (or wannabe stackers - so many of us are plagued by regular boating accidents) is to keep getting physical and wait for the decoupling from paper markets that will happen when, sooner or later, a big holder of paper gold demands physical delivery, causing a spike in demand for physical.

Thu, 01/24/2013 - 13:09 | 3182848 Bananamerican
Bananamerican's picture

if the paper market is that breakable, why hasn't some big boy $tepped up, and broken it? (after placing appropriate loooong bets).

I think CB's have gotten a bit wiser in their playbooks this time...

(effective) Co-ordinated, global, gold price-suppression.....for now 

Thu, 01/24/2013 - 14:33 | 3183141 Thisson
Thisson's picture

Dude, you do not know what the hell you are talking about.  The fact that there are gold or silver derivatives traded is equally likely to drive the price UP as it is to drive the price DOWN.  You seem to lack any actual understanding of the mechanics of how the options/future markets clear and settle.

Thu, 01/24/2013 - 10:50 | 3182436 The Butchers Dog
The Butchers Dog's picture

Finally, the explanation for why price doesn't really matter.  Been waiting a long time for someone to post that (almost did it myself a couple times but didn't have the brain energy to spell it all out).

The only point that I feel is relevant that wasn't mentioned is that GOLD doesn't go up or down in price.  It's 'value' is pretty well fixed, paper currencies are what is fluctuating in value (arbitrage does exist at times, but long term there is reversion to the mean for gold value).

Also, I think it is important to understand what a dollar is.  Esentially a dollar is just a representation of your labor in the past.  You spend today on necessities (food shelter etc) then decide to save for futre necessities or spend a little on luxuries.  What method you elect to use to save for those future necessities reflects your expectations of preserved purchasing power.  You can save in dollars if you trust they will hold value.  In times of rising prices & low interest rates, you can elect to save in tangibles instead of currency (you would forward purchase food, fuel, etc. before the purchasing value of your dollars falls) Or in some cases spending dollars for tangibles like tools so you can be less cash flow dependent going forward (i.e. by growing your own food, producing your own energy).  Any investment that makes you less cash flow dependent in the future will shield you from currency collapse (when there is no cash flow) or even the fluctuations that historically happen before the currency collapses (price spikes on necessities).

 

Thu, 01/24/2013 - 14:15 | 3183091 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

Indeed TBD, gasoline by me is just under $4.60/gallon = 2x 1964 “junk silver” Dimes (90% silver dime @$2.29) = $.20 cents if the precious metal contents remained in the currency, the difference is inflation of the fiat value not the base/precious metal. Gasoline in 1964 was approx.. $.15 to $.20 cents per gallon (any mature people remember the price of gasoline in 1964?)

Thu, 01/24/2013 - 14:36 | 3183155 Moe Howard
Moe Howard's picture

I remember a range of about 32 to 36 a gallon back then.

Thu, 01/24/2013 - 22:03 | 3184503 WmMcK
WmMcK's picture

My dad bought a new Ventura in the winter of '64. First time we filled it up it was 0.269 / gallon.  Don't know why I remember that specific fact.

Thu, 01/24/2013 - 23:01 | 3184669 Big Slick
Big Slick's picture

Hell, I remember 0.85/gallon in 1994 when I was in college in South Carolina

Thu, 01/24/2013 - 10:18 | 3182313 Sean7k
Sean7k's picture

You might want to reference gold prices in the twenties and sixties- then look at what happened when they could no longer manipulate the price.

Thu, 01/24/2013 - 12:37 | 3182748 socalbeach
socalbeach's picture

Money printing and negative real interest rates are supportive of the gold price.  However, the absolute level of gold relative to some other assets is still high.  Take a look at the following chart made in Nov, 2011 (a little over a year ago),

Housing priced in gold

article link: Gold / Housing Ratio Falls To Historic Low

Since this chart was made, gold has dropped a little over 5% and real estate nationally has risen several percent, but real estate is still cheap relative to gold on a historical basis.  So while I think the next big move in gold will be up, that doesn't mean it has to rise immediately.  It may need time for other asset prices, not just real estate, to "catch up".

Thu, 01/24/2013 - 15:31 | 3183116 Thisson
Thisson's picture

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