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James Turk: Central Banks Are Losing The War to Suppress Gold & Silver Prices
Submitted by Adam Taggart of PeakProsperity
James Turk: Central Banks Are Losing The War to Suppress Gold & Silver Prices
My guess is that 2013 and 2014 are going to be big up year for the precious metals, but we still have to contend with the central planners and the various government policies, which have been actively trying to keep the gold and silver prices from reaching fair value. The central planners are losing the war. They may win an occasional battle or two, but they’re losing the war, and eventually gold and silver are going to go higher.
So predicts James Turk, founder and Chairman of GoldMoney.com.
From James’ perspective, gold is not an investment. It’s a sterile asset, meaning it does not generate income. What it is, is money. Its function is to store wealth.
But money, like investments, can be overvalued or undervalued. And what we’re witnessing on the world stage is a gross mispricing of money as central banks engage in depreciation of their fiat currencies via inflation (i.e. money printing).
The process causes a transfer of wealth from those holding overvalued money to those who hold undervalued money. That’s what’s been going on for the past decade as the price of gold has steadily marched upwards versus fiat currencies.
But this process is not efficient. Mass awareness of this wealth transfer is low, so confidence in paper currencies is still high, supporting their perceived value. Market intervention by central banks and other parties conspires to keep the prices of precious metals artificially low and suspect.
This maintains an arbitrage for individuals to buy gold and silver at a discount to true value, which James believes will be slowly realized in full over the next several years as the bull market in precious metals approaches its third and final phase.
A factor in this rise will be the increasing fragmentation of coordination among the central banks. Increasingly, central banks outside the influence of the US’ Federal Reserve are treating the precious metals as true money, and becoming net buyers of bullion for their reserves.
Ultimately, Turk predicts the price of gold will move to somewhere between $8,000-10,000/oz, and that we'll see even higher price appreciation in silver.
The way markets normally work is, after you do have a big move, you get a correction. Even over the past 12 years, if you look at gold, you had big moves in 2005, 2006, and 2007 where you were in some years generating over 20% appreciation in gold. Then you had the correction in 2008. Even though that was a correction, gold was still up that year. Then, in 2009 and 2010 and the earlier part of 2011, you had again big moves. Then you had the correction where basically they moved sideways. My guess is that 2013 and 2014 are going to be big moves on the upside, because what’s important here is not so much the price of gold, but whether it’s a good value.
The proper way to manage a portfolio is, you move assets that are overvalued out of your portfolio and you concentrate on assets that are undervalued. That’s true regardless of whether you’re talking about investments or money. You want undervalued forms of money. You want undervalued investments. I use a couple of mathematical formulas which I’ve written a lot about, one being the Fear index and the other being the Gold money index; by both of those measures, gold is still very, very undervalued, as is silver, for that matter. Silver is even more undervalued than gold. My expectation is that these undervalued assets will continue to rise in price, because the market doesn’t like levels of overvaluation or undervaluation. The market is always constantly changing, moving money out of overvalued assets and moving into undervalued ones. And that’s what we’re basically seeing in the precious metals: people are moving out of overvalued fiat currencies and moving into undervalued gold and silver.
My guess is that 2013 and 2014 are going to be big up years, but we still have to contend with the central planners and the various government policies, which have been actively trying to keep the gold and silver prices from reaching fair value. The central planners are losing the war. They may win an occasional battle or two, but they’re losing the war, and eventually gold and silver are going to go higher – assuming that governments and central planners and central banks still continue to follow these same policies that they’ve been doing, which is defacing fiat currencies.
An interesting thing is that when we saw the price drop in gold and silver at the end of 2012, the demand for physical metal rose tremendously because people recognized that these assets are undervalued, and if they’re going to be sold down to such cheap prices, they may as well just pick them up and continue to accumulate them. So it certainly has a perverse affect when the central banks intervene. In fact, as we’ve noted, gold has risen 12 years in a row against the U.S. dollar – double-digit rates of appreciation. But I guess the best way is using an analogy. If you've got a pot of water boiling on the stove and it’s bubbling away, every once in a while you have to release or pull off the lid to let a little bit of steam out, and then you put the lid back on.
That’s sort of what the central planners are doing. Every year they release the lid, and gold on average has risen over the last 12 years by 16.8%. Then they put the lid back on. One of these days they're not going to be able to put the lid back on, and you're going to go into the third stage of a bull market where gold just keeps rising and rising and rising because confidence will be lost in the currency. I think that’s what we have to be focusing on.
I can’t say that trust between central banks is waning, but you have to recognize that there are two categories of central banks: There are central banks that are in the U.S. circle of control and dominance, and then there are central banks outside the circle of U.S. control and dominance. The ones that are outside of the U.S. control and dominance are accumulating physical gold. The ones within the U.S. control tend not to do that, although it’s interesting that Germany, Netherlands, and now Austria, too, are talking about bringing their gold back.
It’s quite clear that a lot of promises have been made, particularly by politicians and most governments around the world, and those promises cannot possibly be fulfilled. A lot of those promises are going to be broken. Particularly when it comes to the area of gold, a lot of central banks are relying on the promises of other central banks. Oh, yeah, we’ll be good for the gold if you ever ask for it. Those promises are likely to be broken as well, as the demand for physical metal continues to grow. Whether it’s going to accelerate in 2013, 2014, I don't know. But, my guess is the demand for physical metal is indeed going to accelerate over the next couple of years, because I’m looking for serious financial problems to be hitting.
Click the play button below to listen to Chris' interview with James Turk (34m:47s):
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Gold isn't going up ~ fiat is going DOWN... Get that thru your domes...
wilco
"Strong Dollar Policy" = Naked short gold and silver into oblivion
if they losing the war they need creativity
SFPD Cant do Stop and Frisk, So They Now Turned to ‘Hunting’ & ‘Wolf Packing’
http://hiphopandpolitics.wordpress.com/2013/01/26/sfpd-cant-do-stop-and-...
I've been asking that shit!!!
What would happen if the NY Fed defaulted on their gold delivery? Also, this is probably why the high powered guns are wanted in the govt.'s hand and not the people's.
What would happen if the NY Fed defaulted on their gold delivery?
Seems to me they already have......or Germany would already have repatriated it's gold.
How come the govt. can hand out jets, missles, and war-grade weapons to middle eastern regimes, but not trust its own citizens with 10+ clips???
Gold isn't going up~it is going East. Get that thru your domes too...
wilco2
Can I get an amen?
Amen Brother, AMEN!
(same as it ever was)
( . . and you may ask how did it get there? )
(US to China)
...we can't pay you for your investments in our Treasuries, but we CAN keep the price of gold artificially low while you stock up.
Pity the grocery shopper with gold at $8 to $10K. Aaargh.
Possible options are:
~~~
- wheelbarrow full of cash
- EBT cards that don't work
- or... most likely, an attempt at PRICE CONTROLS [which means either empty shelves, long lines, or BOTH]
It's been hell since the rise of gold from $265 to $1650......but I've managed. Despite the hysterics.
Good man....that's true grit, you are an example for the rest of us who also have been struggling for the past decade!
"Mercury dimes, bitchez!"
Sorry Francis, I just couldn't resist. Seriously though, I think one of the other possible options is armed guards at the grocery store doors and sales limited to those with either silver or some other valued exchangeable.
If the dollar collapsed to a point where it was not accepted in international trade, our daily oil imports would stop (along with all the other stuff). That would remove about fifty percent of the daily consumption of oil.
The just-in-time inventory system of retailers from grocery stores to gas statitions to Wal-Mart relies heavily upon daily deliveries by trucks, which burn gasoline or diesel.
It is doubtful that inventory system could sustain and adjust to such a massive supply shock. Even if the dollar was just massively devalued and oil went to $500/bbl, the system probably would still cease to be viable.
There probably wouldn't be any food on store shelves at that point.
Yeah ~ & I'd just love to see how many people would be out there supporting the 'oil consuming behemoth' of US military bases around the world [for wars nobody wants] at that moment...
~~~
Meh ~ people are dumb fucks... It still might take them awhile to figure it out...
The wars are actually necessary to maintain the petrodollar's dominance.
Saddam turns his back on greenbacks
Greenspan admits Iraq was about oil
Gaddafi wanted a gold dinar
Iranian oil bourse stopped trading oil in US dollars
The bases around the world ensure that the oil keeps flowing and that trade routes/shipping lanes stay open.
I'm not advocating that, but that's the way it is.
I would expect them to launch World War III before the point where the store shelves actually go empty, anyway.
Doomsday Clock moves to five minutes to midnight
I would also expect the American sheep to demand war if the shelves went empty. They will want someone to blame.
As always... It's all about 'SPIN'...
~~~
Easier to create false justification to KILL TOWELHEADS, than it is to KILL CANADIANS or SPOTTED OWLS [I suppose]...
Note: francis_sawyer sees no need to kill any of the three... [at least for a 'sub $5 price on a gallon of gas]... Where's Nikola Tesla when you need him?... Oh yeah ~ some 'cartel' NEVER TO BE NAMED put him in the ground & stole all his patents...
The Canadians haven't threatened to stop trading oil in US dollars.
They should probably be on alert if we ever run out of wood, though.
Energy Independence - The Big Lie
COLLAPSE
Once I understood oil and especially peak oil everything else in the world started to make sense from the wars to the economic collapse.
I came to the same understanding when I understood what 'types' were heavily involved in central banking...
~~~
IMHO ~ [just between YOUR stance & my STANCE]... 'Peak Oil' IS NOT an issue when the moment comes that you evacuate the 'GROWTH TO INFINITY' paradigm...
Sure ~ It may be an issue [ON PAR], as things stand at the present... But REMOVE the 'GROWTH TO INFINITY ON A FINITE PLANET' variable of the equation & it vanishes... Moreover ~ PAPER DEBT is what's RESPONSIBLE for bringing the GROWTH TO INFINITY paradigm into existence in the first place...
Just my 2 cents... [& besides ~ It's SATURDAY ~ relax & be entertained]
http://www.youtube.com/watch?v=zkOOCx8tT08
~~~
Oh Look! 3 quick 'junks' [in succession], of my last 3 comments... kito must have just shown up... Welcome kito ~ I'm sure I'll see you later in the thread... [what you ALL have to understand is the following... KITO ~ as will be evidenced later ~ is FIRMLY in the camp that GRANDMA needs to SAVE her joobux on a pallette so that she will be able to 'corner the market' in CATFOOD in years to come]...
Click forward... THIS ought to get fun...
i dont junk you unless its some really inane jew comment.............im too old for the junking every comment thing...........................
<----- I view an up arrow as an affirmation of my worth
<----- I view a junk as testimony of my speaking truth to power
LOL!!!...I love polling ;-)
http://www.youtube.com/watch?v=G0ZZJXw4MTA
Supply and demand bitchez
http://www.lindseywilliams.net/lindsey-williams-the-energy-non-crisis-ch...
No one can declare war on us until hockey season is over. And in Canada, it never ends...
~"Meh ~ people are dumb fucks... It still might take them awhile to figure it out..."~
Yep. Methinks about three meals. After that is when things get messy. There is an upside though. It will only last about six weeks. That's about how long it takes to become so mal-nourished you no longer have the energy to try to fight for food.
"There probably wouldn't be any food on store shelves at that point."
And that!...is the plan to drive all the hungry whose new god becomes the stomach to fall under the babylonian culture of control and imprisonments.
Gonna be a lotta not so alive folks after this possible potential maybe could happen might manifest situation just could take place in the unreality. Here from an unnamed blogging is a liberally stolen comment that seemed to go over the heads of those that are pointed over there. Just for fun, have a gander at this.:
Scenario (Financial False Flag)
"A It is a Thursday afternoon, mid April, and you are driving home from work. Your wife calls you and asks you to stop at the supermarket for a few items. As you are getting the bread and milk, a disturbance begins at the front of the store. As you approach the check-out, you realize that the lines are way too long, and there are several people complaining. From the dialogue you realize that the Credit/Debit system is down. The store manager is trying to keep people calm, while on the phone with the company that services the card-reader system for electronic payments.
Now, a new line is forming at the ATM machine in the store, people shoving and yelling. Apparently, folks went to the ATM so they could pay for their items with cash and get home. Strangely, the ATM is giving out too much money – double, to be exact. Suddenly, everyone wants to be in that line… a fight breaks out, and the front of the store becomes mayhem. You quickly pay for the items you have, going through the express checkout, thanking God that you have cash in your wallet, and get the heck out of the store.
By the time you get home, a story is breaking on the news – the same strange events are happening all over the state. Credit/Debit systems down, and most ATMs not functioning, while others are dispensing “free” money. Later in the evening, you hear that there have been multiple shootings at ATMs in the area, as people fight over the free money coming out of them… flash mobs are reported at some of the grocery and electronics stores in the city where you work.
By morning, the news is all about hackers that have broken into the ATM network, and how the banks have had to shut the ATMs down to prevent further losses. There are images on the TV of growing lines at the banks, as people must go to a bank to get cash, in our previously ‘cashless’ society. Later in the day, you hear that there are now fights breaking out at banks as people tire of the long lines, and become fearful…because bank branches are running out of cash. That afternoon, a grocery store downtown gets flash-mobbed for the third time, only this time the activities go beyond plain theft – an all-out riot erupts because people cannot get what they want, the shelves having been emptied by the previous flash-mobs.
On the drive home from work, you hear that several banks have closed branches early because they ran out of physical money. One of the branches was vandalized by people who had been waiting when the branch ran out of cash and closed up – smashed windows, smashed ATM machine, and several injured people taken to hospitals…several people were arrested, but the police are reviewing the security videos and “expect to make more arrests in the case.” That evening the news announces that these things are happening all over the country, and that looting and rioting have begun in several major cities. When bed time comes, you decide to get your pistol out of the safe and keep it by the bed, over your wife’s objections… “just in case.”
You wake up on Saturday morning to a different world – several of your neighbors have been burglarized, and the news is full of riots, robberies, and car-jackings. The mayors of several major cities have declared a state of emergency, and are urging people to stay home and lock their doors. The world seems to have come un-hinged. Your wife is no longer objecting to your pistol being ready at hand.
One of your friends owns the hardware store downtown, and he calls around 11am to ask if you need any shotgun shells, or other ‘security supplies’ – he says that he has a few boxes of 12ga. put aside, and the rest have all been sold. He also says that people have been buying plywood, screws, nails, steel bars, and anything else they can get to protect and reinforce their homes – he warns you that he expects to sell out of many supplies today. He has talked to many people that morning, he is clearly worried. He says one customer told him that he has a brother who lives in Philadelphia who had just called him, and said that there were rioters in the streets there, and that the local news showed pictures of some of them who were carrying guns and waving islamic flags.
By Saturday evening the insanity has infected the city nearest you, about 20 miles away, and there is a constant stream of reported rioting, looting, and shootings on the TV news. Your neighbor is a police officer in town, and he comes over to talk to you briefly before heading in for a shift – he says that his department has been told that they may have to send officers to assist in the city, and asks if you can you keep an eye on his family during his shift overnight? What can you say but “of course I will”…and think to yourself, “it’s not like I was going to get any sleep anyway.” Before heading out, he hands you his police scanner, quickly shows you how to use it.
Overnight, you hear gunshots in the distance…once, then again, then several more times. Gunshots and sirens, and the squawk of the scanner as each event is assigned to a unit. As the night wears on, you think back on the conspiracy theories you have heard over the years, but always dismissed as the ramblings of people living on the edge, with too much time on their hands – restless chatter of New World Order, global banking cabals, communist infiltration, etc. As much as you still don’t buy into the ranting of the “tinfoil hat brigade”, you have to wonder if the hackers who did this actually knew what they would be causing, or whether they were just trying to steal money? Morning approaches, and you realize that the police are sounding rather frustrated – there have been over 50 break-in calls since 11pm, but no one has been arrested. It is as though the police are being sent on wild goose chases. You drift off to sleep wondering, “Dozens of businesses broken into tonight, and a number of houses too, but no arrests, except for one drunk driver. How can that be?”
With daylight, your neighbor returns, but he is not happy, and neither are you when you hear the news – he and most of his squad have been assigned to assist the department in the city for a shift – he is home to grab the bag which is packed with his riot gear and other “special equipment”. He reminds you that his wife has a pistol, knows how to use it. “She also has the keys to my gun safe” he says. Both of you have to look away from the other at that moment – what it suggests about the future is just too ugly to think about, yet it can’t be avoided. He thanks you again for helping him out, and drives away.
Days later, the banks are still not open, the grocery stores are all looted and shut down, the gas stations are all empty, and your life has been reduced to shifts of community-watch duty. Armed raids by gangs are being reported everywhere, including your small town, and there are reports of huge packs of urban residents walking and driving out into the suburbs looking for food and refuge – everything on the news is about violence.
When your police officer neighbor returns (after nearly 4 days) and warns your neighborhood watch that a large mass of people is less than 2 miles up the road, looting and destroying people’s houses. He also tells you that many of the police are exhausted and walking off the job, as he did, to go home and protect their families, because there is just no managing the amount of violence which is happening. “It’s just plain crazy out there – people robbing and killing each other 24/7", he says, “and even with 4 cops in a cruiser, we’re not safe to go in and break things up. A lot of cops have been injured, some killed. It was just time to get out…to get home before I got hurt on the street. We need to get prepared – those people are coming, and they are crazy hungry!”
That afternoon, the mob of people is spotted coming up the road towards your neighborhood, now less than 1/2 mile away. Some are on foot, but they also have some cars and pickup trucks – there must be over 200 of them. Those that don’t have guns are carrying shovels, axes, sticks… in your neighborhood, everyone has been preparing since your neighbor brought home the warning. You have sent several boys out as runners to alert folks in near-by neighborhoods that danger is coming. Every gun is in someone’s hands. Your men have also pulled axes, shovels, and other tools from their sheds to be used as fighting tools, and you have a rudimentary plan -
You have 6 veterans with combat experience, and they each have a rifle and a pistol, plenty of ammo. They will go out and engage the mob just past the edge of the neighborhood, and will attempt to keep them on the main road, to divert them past your sub-division. The rest of your men are assembling along the two entrances to the neighborhood, a few houses back from the main road – they are preparing to make a massed defense against the coming mob, if they cannot be diverted by your advanced force. You have positioned vehicles, trailers, and brush in the roads to stop the mob’s vehicles, as well as providing some additional cover for your defense force. Meanwhile, the moms are gathering the children, the sick, and the old into a small cluster of houses in the center of your subdivision. They are also pulling the food and other resources out of the most vulnerable homes. Hopefully, the combination of high resistance and little/no rewards will keep the mob moving past your neighborhood… The unspoken fact weighs heavily on your group – if there are 250 in the mob, then you are outnumbered nearly 2:1, making a head-on fight a truly horrific ordeal. A painful silence has settled over everyone as you make your final preparations.
It has been 6 days since the ATM machines went down, 4 days since the last grocery store and gas station in town closed, and now you are preparing to fight your first battle against a mob of hungry, violent looters. Another mob has already arrived downtown, and you hear on the scanner that the police and fire department are very busy. You know that help will not be coming, because you have called to tell the dispatcher what is happening, to ask for help, but all he could say was that, “there are no officers available right now. I hope your plan works…”
- – - Here, I will end the story, because what happens next cannot be told in a dignified fashion. In that clash lives are lost on all sides, and many are injured. There are no winners in this combat, only those who survived. The most profound impact is that, in less than the space of an hour, the hope of a return to normal life is destroyed for over 100 families in that neighborhood. War has touched them in their hearts, in their homes, and it has put their community to the test of fire. Those who survive have a chance to rebuild, but they have all been forever changed.
In such a scenario, the majority of Americans would either be the suburban defenders, or would be part of the mob. After such an event, our nation would be forever changed – grossly factionalized, and the gaping wound in our national consciousness cauterised by the violence. Thus wounded, we would be even more sensitive to subsequent events – a second disruption would move even faster than the first, with violence and looting coming within minutes, not hours or days. Our enemies all know this – they consider it a tool for their use against us. We must not be ignorant of the dangers we face…"
.
seems about right to me if those 50 million food stamp debit cards ever went down it gets rather serious rather fast.... 50 million americans cannot feed themselves not to mention another 12 million on disability so its actually one in 5 adults and one in 4 children .
Translate this into 1930 soup lines and every city in amerika would have lines tens of miles long .
Thats a straightforward unambiguous failed society writ large end of story and some have pointed out that the social fabric when people have nothing to eat holds together about 72 hours then they just walk in and take it. Lock n load people .... coming to a theatre near you.
@Heart & vamoose
~~~
Thus the 'IMPERATIVE' for central banks to KEEP PRINTING... I'm DEFINITELY not making them out to be HEROES for doing so... I'm simply saying that I'm certain that they see the same writng on the wall...
QE4EVA... It'll work until it stops working... I have zero control of the outcome... I might not even survive the aftermath... All I can do is TRY... [& what 'internet bloggers' get their panties in a bunch as to what THEY PERCEIVE the francis_sawyer position on Jews is, OR IS NOT, won't matter a bit in that moment]...
Scenarios like this may be coming but not for A VERY LONG TIME. Notice how Greece and S. Europe have been dragged out since 2008. The US will go last after Europe, UK and Japan. Until then the dollar will be the safe haven. THINK DECADES for this to play out.
Greece, S. Europe, UK and Japan are not the USA. Ask the Korean marketeers in LA if something like this can happen.
I leave you with a quote from Laurence Peter: "America is a country that doesn't know where it is going but is determined to set a speed record getting there."
Humanity as a whole has no plan, it´s not just the US. We are already at 7 billion+, and using a system of trade and consumption which condems at least 3 billion into poverty, many to premature death. The rest consume, hoard and waste, some groups much more than others. Eventually, as the finite resources evaporate, the system starts to fail. The impoverished swell to 5 billion, and the poor will die screaming, fighting, begging. The rest close their doors, hoard the last of the supplies, surrender their rights to militant governments, and wonder how this was all possible.
It's not the trade and consumption system that is doing that. I wish kids would learn Economics, but most of you are too dense to grasp reality.
Much appreciation for your well valued contributions. This goes to everyone else here also!
Justa Messenjah here.
How about a credit, TH, or are you quoting yourself, which I doubt.
A quick search via Google gives me this: http://www.godlikeproductions.com/forum1/message2119739/pg1
Yes, credit the author, not the messenger.
One can only wonder if the rest of the story will come along.
Maybe the mass mind is still writing it?
.
Getting the heck outta dodge is looking more and more attractive. Bangkok may not be cheap but northern Thailand still looks pretty good:
Cost of Living Comparison Between Washington, DC and Chiang MaiThis guy seems to be quite miserable paying 200 a month rent and 1 dollar meals:
http://www.youtube.com/watch?v=4xxtaIhb1bY
50k investment will get you permanent residence in the Phillipines, as low as 10k for pensioners:
http://www.lifeandloveinthephilippines.com/what-is-a-special-resident-retirement-visa-srrv-2/
Cost of Living Comparison Between Washington, DC and CebuSilver For The People
http://www.brotherjohnf.com/
Heh, yes it's chop good idea to be the only Whitey around after Amerika destroys the world economy. Say, drink a bottle of sauce so you're pre-seasoned for the locals.
You're ridiculous if you think those countries will stop functioning because the US screwed them.
And you're quite the nut if you think you won't be set upon and put in the stew. Or stocks.
You're like a cute version of ZH original Mako.
I am one of the few who believes Mako is correct.
That is what pantries, smoke rooms, drying sheds, cold rooms, and nice gardens, chicken yards, rabbit pens, milk goat, sheep, on 4.75 Acres are for. A plus is if it's way off in the country... Going Galt, my friends...
Phrophets of Doom on the History Channel
http://youtu.be/X5e_gPJ2t9g
First section on this topic with Dr. Nathan Hagens an eye opener.
" there are two categories of central banks: There are central banks that are in the U.S. circle of control and dominance, and then there are central banks outside the circle of U.S. control and dominance. The ones that are outside of the U.S. control and dominance are accumulating physical gold. The ones within the U.S. control tend not to do that, although it’s interesting that Germany, Netherlands, and now Austria, too, are talking about bringing their gold back."
control and dominance are decreasing
If gold goes to 8-10k...WTF would stop it there? it would be wheelbarrow / bread time
Pity the loaf of bread buyer too.
Indeed gold is primarily about preserving purchasing power, but it also enhances it, too. More goods/services produced while amount of gold produced is way less means prices going down in real terms (in terms of gold).
Same difference..., unless you are smart enough to borrow fiat and buy gold;)
If you 'borrow' anything [despite gain], you're a hypocrite because BORROWED FIAT is the root of the problem...
~~~
This is probably a dilemma requiring Sun-Tzu or Confucious to solve...
They maka the rules. I playa the game.
Hypocrisy is the essence of Ben, Rufus, and the ruling class. I am not a potted plant. Why should I sit on the side lines and bitch, waiting for the return of free markets?
You understand inflation. Why don't you understand that using leverage against the bastards brings it to an end much sooner?
@kaiserhoff
Understand that I'M NOT AGAINST YOUR LOGIC there... Go for it!...
I don't think we disagree on fundamentals. I see credit as a tool, like a tractor or a knife.
I can be trusted with a knife. OJ Simpson, not so much.
I was initially trying to support your view of inflation, that fiat going down raises all durable goods values. I don't understand why so many here have trouble with that concept. Getting family and friends through the coming disasters... that will be more problematic. Happy trails.
Yessirree... HappyTrails...
~~~
Look ~ I'll admit 100% that I think your 'concept' is FLAWLESS... [which is akin to cutting off their dicks & then shoving them down their throats to gag on]... Like I said ~ "Hard to argue with that incentive"...
Besides, if you work under the simplifying assumption that the value of gold is a constant, then you have to use leverage just to break even. When you go to spend your gold the government will tax your gold "profits". If you didn't use leverage to "get ahead", those taxes now mean you failed to preserve your wealth. (And who knows how high they might raise such taxes in the future - so just use as much leverage as you like to improve your odds/outcome.)
True. Ignoring interest payments and assuming like you did that gold just keeps up with inflation, I come up with the following:
If the tax rate is T, you must borrow enough to be able to purchase 1/(1-T) times as much gold just to break even.
So if you had $10K for example, and the tax rate were 0.35, then you would borrow enough to purchase $15,384 ($10K / 0.65) worth of gold. If the inflation rate were 50% say, your gold would go up to $23,076. Then you'd pay $2,692 worth of taxes leaving you with $20,384. Then repaying the loan of $5,384 would leave you with $15K, or the same in dollar purchasing power as you had before.
It is easy enough to add an interest expense, say from a home mortgage, to the formula.
Since leverage can be risky, another option is to buy precious metals stocks, but that has it's own set of risks as well.
I don't know, this looks kind of suppressed to me:
http://www.pmbull.com/gold-price/weekly/
And, it looks kind of like it is gonna get a lot more "suppressed" in a hurry, technically.
- I hope that means it is gonna pop real hard real fast.
it will "pop" on Tuesday. this is naked manipulation in front of the month's expiry on monday. they have been doing this for years. everybody knows....except the bozos at the CTFC.
I hope you're right about that because it sure seems to me they've been winning the war for the last year and a half in gold and 21 months in silver.
If it takes another 10 years to get to $8-$10K. I will wonder if it was worth it.
Then there's the gold stocks. What a fucking nightmare.
Bravo Zulu francis
So PM prices aren't being manipulated or haven't been for the last 40 years/
Well maybe, it is because the dollar is no longer the paper of choice?
Must Watch: The U.S. Dollar Collapse Is Accelerating. By Gregory Mannarin:http://www.youtube.com/watch?v=US0c8POzIR4
At the moment you are largely correct in saying that the what we are seeing is value of FIAT is going DOWN and that this is reflected in the increasing cost of gold (when priced in fiat - choose your currnecy).
However part of the increase is an increasing realization that the the current system of fiat is on the verge of imploding. As we see a collapse in the existing financial system, you will not only see a collapse in the value of various paper 'stores of value' - currency, bonds, and any other form of 'IOU's' you choose to name - but you will see a rush to gold (and silver) that will result in a very real 'revaluation' of these hard assets. The 'money' of old will once again be seen as the only 'money' one can trust - and will be revalued to reflect that.
You wil not only have a situation where tangible assets will cost far more when priced in paper terms - if anyone is willing to sell hard assets like food, property or anything else for paper, BUT the buying power of gold and silver will increase relative to those other tangible assets. In effect gold and silver will be worth far more in terms of buying power than they had been.
Making up an exchange:
A barrel of oil priced at $100 in paper fiat today might be sold for $500 in fiat (IF anyone was willing to accept fiat in payment)
That same barrel which cost 1/15 to 1/20 of an ounce in gold could still be be bought for gold but would cost 1/100 to 1/200 of an ounce - reflecting not only the decreasing value of fiat BUT the INCREASED value of gold.
One can argue that gold (or anything) is worth only what people perceive it to be worth. BUT when paper IOU's turn out to be worthless - as their buying power goes to zero, what alternative will remain. Unlike past economic collapses where the problem was localized and other fiat currencies could be used as a 'store of value (think German Marks in use when Yugoslavia's Dinar imploded or the $US and Rand when Zimbabwe's dollar collapsed) ther ewill be no other 'refuge' available. There are simply not enough Swiss Francs, Norwegian Krones, Singaprore Dollars in existence to meet the demand for safe harbor that will arise.
Throughout history people have perceived and used gold and silver as 'money' - stores of value. Indeed ANYTHING holding real worthwhile tangible value that is easily exchanged can fill this role. If things really get bad then I suspect the 'buying power' and perceived store of value represented by copper jacketed lead will also increase substantially. In post WWII inflationary Europe a carton of cigarettes (even if old, stale and for all practical reasons, 'unsokable') was perceived to have and hold value far better than paper money. In places liek Brazil and Argentina people would buy SOMETHING, ANYTHING after spedning their wages on food. Paper money was losing value rapidly so ANYTHING of 'value' was better than holding cash.
Given their historical role, I suspect gold and silver to hold value far better - and be of far more practical use ias mediums of exchange and stores of value - than a carton of cigarettes. The value of precious metals may explode and become 'overvalued' - the smart people will exchange at least some of their hoildoings for relatively underpriced assets at this time - be it land, company shares, or whatever. Eventually, a 'new' ssytem will come into existence to replace the failed one. I expect the 'new' value of precious metals will be far higher in buying power than their current value BUT lower than what it was at some point during the melt-down when demand for safety pushed prices to extreme levels.
"Gold isn't going up ~ fiat is going DOWN... Get that thru your domes..."
I agree with your intended meaning BUT, actually, over the last year Fiat has NOT been going down against PM's OR other Fiat because the CB's are all playing the same "Race to the bottom" game. The USDX has been in a narrow trading range around 80 for a LONG time as a result.What this means is that if the Fed wants to devalue the USD to inflate away the debt Instead of the only other alternative, which is default) it is going to have to allow PM's to appreciate against USD, taking advantage of the inverse correlation between USD and all commodities, PM's in particular. The Fed CANNOT have it every which way and given the desperate need to inflate away the debt, it will prioritise devaluing the USD and de-prioritise manipulating PM's. IMHO.
Doesn't change what he said. It just gives the illusion of delaying it.
In relative terms, gold will gain value when other assets deflate. In a PM bubble, instead of buying one suit it will temporarly buy two or more suits.
francis_sawyer: "Gold isn't going up ~ fiat is going DOWN... Get that thru your domes..."
This is such as false statement at the current time I don't know where to start. The worst part is all the up arrows given to francis sawyer indicates a total misunderstanding of a many on ZH of the situation. I imagine these are emotional speculators married to PMs, those destined to lose their money.
So, I will only say this. Even with all the massive printing, worldwide, the prices of PMs isn't where it should be. I would love to see gold above $3k and silver above $100/oz. But its not, that is reality - not wishful thinking.
Now the problem with francis sawyer's post is this. What is gold and silver priced in?
Answer: fiat currency.
So I ask you to be critical in your thinking. What are you going to pay your debts in currently? Are you going to pay your mortgage in gold? Are you going to buy your groceries in gold? How about your utility bills or the gasoline for your car?
No, I imagine you will pay for those goods in fiat currency. And if you have no fiat currency but you have gold, I would guess you would sell your gold to get fiat currency to pay those bills.
I don't like that situation, but that is reality right now.
I also suggest you look at long term charts of gold versus the US dollar. Both have been basically sideways, meaning no change. That would disagree with francis sawyer's post. I await anyone to reply without personal attacks. And if you want to give me down arrows, post why. Give me a logical response to my post. I want the current fiat currency system to collapse as I believe it is corrupt.
What we have now is PMs, priced in fiat currency. Until we have the exact opposite (currency priced in PMs), such a statement that francis sawyer made, is false.
The problem is that you are not paying attention to the exported fiat, and you are focusing on only two items in the economy that are being impacted.
well i hope he's right since i'm totaly broke ... beside that huge pile of gold and silver coints i'm holding right here :-)
How do you post from the bottom of a lake?
In his past life, he was Jar Jar Binks [from Naboo]... now ~ he's Super Broccoli!
~~~
BTW ~ 'Alpo for Granny'... GREAT username...
If you can hold it, it's not enough
The loss in confidence in the Central Banks will not just cause a rise in the price of Gold and Silver.Loss of trust will lead to War and Ruin.
Every government degenerates when trusted to the rulers of the people alone. The people themselves, therefore, are its only safe depositories.
T. Jefferson
As soon as we fucking bury the asshole paper shorts at JPM and HSBC it's all over.
Fuck you Blythe, fucking rotten stinking whore.
So HSBC's is (potentially) preparing to cover?
http://www.zerohedge.com/news/2013-01-23/silver-bars-being-secured-hsbc-...
LSL, I like your style. +1000
74 years was needed before the USSR collapsed. The current experiment will die of its own weight too. But when? There are so many more SLUGS [Slow Lazy Unable to Grasp] at the trough now.
If it makes you feel better, the USA's soviet period began some time ago.
The USSR is a different story. Starting with Stalin, USSR was able to make & keep itself self sufficient for quite awhile. It did not need any colonies to sustain itself.
The brief history of USSR.
· From 1917 to 1945, the USSR was trying to become self-sustained and self-sufficient, and, using the Great Depression, the WW2, and barter exchanges, to acquire industrial machinery and technology from the West.
· From 1945 to mid 1970s, the USSR was self-sustained and self-sufficient.
· Then the Soviet elite was facing a loss of its ideology and a runaway desire to enrich itself still adhering to a failed socialist economic model. The USSR started to move away from self-sufficiency. From this moment, the USSR was doomed since they did not have colonies to supply them with free goods.
· In just 5 years, by early 1980s, the USSR started to disintegrate.
Consequently, it took well under 10 years from a moment of departure from self-reliance to an economical and political collapse. It has to be remembered that the USSR is extremely resources rich country.
The West is a totally different story. Just look at present England. It does not have its own resources. It does not have highly competitive industries like Germany or Japan or S. Korea. So, what is it left with to support their high standards of living? You must somehow rebuild and repackage their colonial past one way or another. As long as one can keep products and services the West imports close for nothing by paying for it with funny money then there were no problems. However, Russia, Asian and some African countries have starting to ask and demand to be paid back in real goods and buy valuable West assets, this situation became totally unacceptable to the West. This situation is totally unacceptable to the West. Consequently, the new world wide conflict became unavoidable.
In 3-5 years, China will find itself in a situation when it has to aggressively (including military) defend its own geopolitical interests. At this moment, a hell will get loose all over the world. The only question: how much longer will China and Russia accept funny money (US$ and euro)?
In a mean time, the West must keep commodities and Gold prices down.
The USSR was doomed from the moment they stopped being able to feed themselves. From that point on, they had to use dollars to buy food.
They were so "self-sustaining" because their population was starving. I love hearing the USSR propaganda material decades after their fall.
How many lies does it take to prop up a ponzi empire banking scheme?
16 Trillion and counting ...
I always thought it was "3"... But I like your answer...
~~~
http://www.youtube.com/watch?v=Jhjb4P_jnKk
Germany: "Bernanke and teh the Fed I want my gold!!!"
Bernanke and the Fed: "We don't have it. I will take us time to accumulate it. Not to cause a painc let's
annouce that it will take 7 years to deliver"
How do you know that Z. Germans did not themselves use that gold as collateral to borrow dollars from the Fed? Perhaps they will repatriate it as they pay back the loans to the Fed, and by so doing prevent its substitution for tungsten.
I can’t say that trust between central banks is waning, but you have to recognize that there are two categories of central banks: There are central banks that are in the U.S. circle of control and dominance, and then there are central banks outside the circle of U.S. control and dominance. The ones that are outside of the U.S. control and dominance are accumulating physical gold. The ones within the U.S. control tend not to do that, although it’s interesting that Germany, Netherlands, and now Austria, too, are talking about bringing their gold back....
Key statement. When the Oligarchy splits up and thieves fall out...
We don't know when it'll come the Sarajevo moment of financial discord to the Metternichian construct of old; but given the boiling water under the lid it will...
That gives significance to this intra CB battle of currency devaluation as the Euro climbs and the Yen/USD slide.
Asymmetry is a bitch to putting up a common front when you are on a steep mountain climb.
First man who slips pulls down hard on the others and they start cutting the chord; very fast if they still can!
Read this to complete your education on the Davos Forum and crony capitalism :
Bill Black: Why the World Economic Forum and Goldman Sachs are Capitalism’s Worst Enemies « naked capitalism
falak pema: "I can’t say that trust between central banks is waning, but you have to recognize that there are two categories of central banks: There are central banks that are in the U.S. circle of control and dominance, and then there are central banks outside the circle of U.S. control and dominance. The ones that are outside of the U.S. control and dominance are accumulating physical gold. The ones within the U.S. control tend not to do that, although it’s interesting that Germany, Netherlands, and now Austria, too, are talking about bringing their gold back.."
Comment: the problem with your post is the following:
1) According to the World Gold Council, the USA has the highest gold reserves standing at 8,133.5 tons. In second is Germany with only 3,396.3 tons.
2) Those other nations are being stupid by storing their gold in foriegn places such as the USA. Recently, the USA has said it might take up to 7 years to give Germany some of its gold back.
We all know of crony capitalism. It is racketeering between the governments and corporation. It's the reason why all the shannigans have gone on for so long and why no one of importance really goes to prison.
Eventually, I can only hope that a majority of people in the US realize that the system must be brought down. And that might mean dramatic civil unrest and many deaths of Americans fighting for freedom. That is why I have posted several times how disturbing it is that the shortage in ammuntion was basically in military grade (223/5.56, 308/7.62 and finally 22lr(a super cheap round). If civil unrest occurred, a gun ban won't matter because you won't be able to find ammunition
If Lance Armstrong can leverage a lie into $100 Million in fiat, how much could the Fed leverage its lies into?
all depends on the # of blood transfusions...
Mr Bernanke, I rode with Lance Armstrong. I knew Lance Armstrong. Lance Armstrong was a friend of mine. Mr Bernanke, you're no Lance Armstrong.
I called the President of my credit union branch office earlier this week. I asked him if I could store some physical bullion, in a safe deposit box.
His reply was, we don't store metal at any of our branches, and "Thank God we don't"... My first thought was collateral, on new and outstanding loans. Am I wrong?
Don't know why you'd want any institution to hold it in the first place.
That wasn't my intention. You are correct. My intention, was discovery.
I'll hold it for you YC... [While you're at it, I'll hold onto your jet & Ferrari]...
Don't you understand the n. exploratory? Oh you only read the first sentence... I don't own Jets. Yes, I own a few Ferraries.
kewl then... I'll just hold those [& your gold]... For a FEE [of course]... ror
But YC, people who own Ferraris usually don't misspell "Ferraris."
why does he give a shit what u put in a safety deposit box? They can't led out etc. anything in a safety deposit box. he should have thanked you for making the wise decision to own physical metals and the foolish decision to trust them with it.
that is weird
Banksters trade leverage. Hold a bankster party in a "Gold Mine" and the ghosts/ Tommy knockers will sort it out ;-)
Fonz, the C/U doesn't have "safe deposit boxes". None of them do. They don't want the liability of storing physical metal, diamonds, rubys, Art, Ect...
i wonder wy that is. i'm sure the TBTB banks would love for people to keep their PM's in a safety deposit.
You're fired up Fonz. Bundsbank respectfully disagrees.
nah i'm cool. sorry if i came off wrong. i have read in argentina a lot of people kept pm's and other valuables in their banks safety deposit boxes. when they defaulted and the banks were shuttered those people never were allowed in to get their valuables. the banks kept em. makes me think it could happen here too and the banks would love to have it. i know people who keep cash in their safety deposit boxes too. seems like the same situation. kiss it goodbye.
Fonz, It's ok. You have been through a LOT of turmoil. Neighbors losing homes, protecting your family, and a "plethora" of other personal decisions. I'm amazed at how well you have adapted.
FWIW/ Fuck the malls, and the over rated " Chee(s)ze Cake Factory"... yer doing just fine in my book.
Yen Cross mentioned Credit Union. That is hardly TBTF
Yen Cross: "I called the President of my credit union branch office earlier this week. I asked him if I could store some physical bullion, in a safe deposit box. His reply was, we don't store metal at any of our branches, and "Thank God we don't"... My first thought was collateral, on new and outstanding loans. Am I wrong?
FreeMktFisherMN replied: "Don't know why you'd want any institution to hold it in the first place. "
Yen Cross replied "That wasn't my intention. You are correct. My intention, was discovery."
Comment. Yen Cross, you just wasted a lot of your valuabe time for nothing to get a BS story that has no meaning.
Manipulation presentation from Gata, the latest; http://www.silverdoctors.com/bill-murphy-chris-powells-full-presentation...
if the dollar has been losing value every year for like 80 years i wonder when Turk will consider it "undervalued".
his analogies are kind of annoying. the lid on the pot etc. this is not about managing porgfolio's anymore. the cental planners are playing a different game. Turk sounds like a football commentator trying to rationalize why a game played out a certain way. there are too many variables now. if the central planners have as firm of a grip on the markets as we think they do they should have no problem sending the paper price down huge.
the best chance gold has is for someone to claim that they asked for their gold and got shafted. something has to seperate paper from physical. until then this just goes on and on.
The gold bulls continue to believe au and ag are the answer.........I've been saying for quite a while that it just isn't the case....take the money and put it into something people will need....when the worlds assets implode, gold will be dragged down by the neck.......id rather stock up on physical dollars, toiletries, ammo, hens, goats, etc......nobody needs gold......but they will need dollars to buy necessities.........
Why will people need dollars to buy necessities? Seems like an arbitrary assumption, like all assumptions. It's fine if you are making it, but just know you are making it.
i agree with that Kito. that is the fly in your ointment. it is an assumption. it reminds me of people saying "housing has to go up, they ain't making more land".
i also think gold bugs are making an assumption that when the whole thing falls apart, gold will be money again.
nobody knows and everyone is going to have to make their best guess.
i also think gold bugs are making an assumption that when the whole thing falls apart, gold will be money again.
***********
Gold has always been money-bankers and governments saying it isn't-doesn't change that fact-
Gold acts like money-people save/hoard it and so it is money-by that definition-
Of course it's an assumption.....a logical one.....when every overpriced asset goes kaboom, every digital dollar gets erased, only cold hard cash and necessities will rule the day........gold is not a necessity......
it is a very logical one. so is the gold assumption. i have decided to own both. that should alert everyone on here that they will both be wrong. because i have the power to mush both.
Very Buddhist of you fonz....the middle way.....
You are a douche/ Let's play.
Any gold bug worth their salt knows that at the height of the chaos gold should be exchanged for high quality real estate.
You don't worry about eggs if you've got the farm
This KITO pawn shop owner makes me laugh!
Yen, did you just call me a douche???
Your avatar is Donny Osmund, and you're surprised?
drop the avatar into the google image search bar....donny won't be popping up....
You're off the chain if this is Miss Kito
http://www.checkoutmyink.com/tattoos/robertcyber/miss-kito-1
Mrs. Kito to you sir.......
And I just learned that you can search google by dropping images in the search bar...where the f*&k have I been?
...and STOP using Google!
CMon get fighting you 2
@BigDuke6
~~~
You're breaking a cardinal rule of 'FIGHT CLUB' [only 2 to a fight]... But since it seems EVERYONE is piling on... kito ~ WTF do you know about 'goats'?
Goats are kosher.....Ben bernanke and Lloyd blankfein are not........
White shirts [from Madame Paulette] & silk neckties are cool
Blue shirts [from Jos A Bank] & discounted blue blazers are not
I'd rather be a real man shopping at jos a bank than a metrosexual shopping at Madame Paulette........
I'm still waiting to hear from yen who seems to be pms-ing.........
maybe he's doing barrel rolls in his GulfStream...
~~~
& I'll take the Madame Paulette comment ON PAR... In any case, francis_sawyer prefers overalls [but that's just ME]...
Hey I'm sorry but I've wanted to see these two ladies in a mud wrestle for like ever.
I'd insult you but we'd end up agreeing that crockettalmanac is a crock of shit
You really need to re-prioritize your long standing desires.......not something you should be proud of.....
@Duke
~~~
I've been trying to draw CROCKETT out of his cave for a week now... ALAS ~ that teddy bear is in hibernation until his agent calls him for the next 'Snuggies' commercial gig...
He was following ur every move before...
He's been true to his threat , no more following until you be nicer
'Nicer'.. to me... would appear [on surface], to be 'ANTI-Darwin-ist'... Not to classify francis_sawyer as a DARWINIST, per se... But the backwards reference still holds...
~~~
& Duke... BESIDES... It's SATURDAY NIGHT... You need a little gay-boy music to get the party rollin'...
~~~
http://www.youtube.com/watch?v=SqpOxaUVWwA
Lol
And I like ZH when it's like a western saloon where everybody is throwing chairs and there's 10 punch ups at the same time
So let's go!
This whole debate comes down to inflate vs default.
ZH Golden boy has this to say (go to 15.35 mins in to 16.20 mins)
http://www.youtube.com/watch?v=JUc8-GUC1hY
Either road in my opinion leads to cash being trash.
I see Kito's point though. In deflation, for a while, cash can be king. Debt destruction and deflation ends up taking down the banks. If that happens the dollar goes to shit anyway and you get mad max. But mad max is probably what's coming either way, so why bother arguing? They will print and grab everything they can with it, and try to hold on tight when the whole thing goes to shit.
but between 'then' (SHTF) and now (and always, for that matter), the way to protect (and enhance) your wealth is through PM ownership (mining companies, too, though obviously I'm for anti-counteryparty risk). Put physical cash in your mattress and purchasing power goes way down as things like the DJIA (nominally) levitate and you're having your 'capital' earn nada to keep up.
Contrary to the modern portfolio theory/long term cap mgmt model, wherein the 10 year note is the 'risk-free' 'asset,' the most conservative risk-free play is gold. Even if say gold tanked quite a bit like it did in '08 or whatever, it still held up a lot better than the Dow, and above all it preserved wealth. Oil and other things also went down, so priced in real terms gold did the job of preserving purchasing power. Holding PMs is the only way to not get wiped out. Sure, purely in terms of what happened and in this silver manipulation time, selling at the top of $49 or whatever and then buying again as it's now around $31 would have worked out 'better' in terms of selling high, buying low, but eventually (and I think we're getting close here as the markets don't reflect the Main. St. economy and the Fed can't print purchasing power) everything will shoot up (nominally) and cash holdings will get wiped out by the hyperinflation finally manifesting itself as higher prices as elderly Asians cash in their savings and finally do some consumption they've put off, sending a tsunami of dollars back here.
In short, holding PMs is the only way not to get wiped out. If we got the crash we needed and liquidation is allowed to happen, and real valuations occur, gold would still preserve value, and I think would still be way higher even than it is today because of all the money already printed globally. It is super under-valued.
but between 'then' (SHTF) and now, the way to protect (and enhance) your wealth is through PM ownership (mining companies, too, though obviously I'm for anti-counteryparty risk). Put physical cash in your mattress and purchasing power goes way down as things like the DJIA (nominally) levitate and you're having your 'capital' earn nada to keep up.
Contrary to the modern portfolio theory/long term cap mgmt model, wherein the 10 year note is the 'risk-free' 'asset,' the most conservative risk-free play is gold. Even if say gold tanked quite a bit like it did in '08 or whatever, it still held up a lot better than the Dow, and above all it preserved wealth. Oil and other things also went down, so priced in real terms gold did the job of preserving purchasing power. Holding PMs is the only way to not get wiped out. Sure, purely in terms of what happened and in this silver manipulation time, selling at the top of $49 or whatever and then buying again as it's now around $31 would have worked out 'better' in terms of selling high, buying low, but eventually (and I think we're getting close here as the markets don't reflect the Main. St. economy and the Fed can't print purchasing power) everything will shoot up (nominally) and cash holdings will get wiped out by the hyperinflation finally manifesting itself as higher prices as elderly Asians cash in their savings and finally do some consumption they've put off, sending a tsunami of dollars back here.
In short, holding PMs is the only way not to get wiped out. If we got the crash we needed and liquidation is allowed to happen, and real valuations occur, gold would still preserve value, and I think would still be way higher even than it is today because of all the money already printed globally. It is super under-valued.
I think it'll be every bit as bad as the Great Depression, only this time it will be a hyperinflationary depression way worse, as back then at least the U.S. had the industrial capacity to produce things, whereas now we it is the global engine of inflation.
Capital hoarding. Deflation. There'll be massive civil unrest and war before hyperinflation takes off. Weimar has not been forgotten by the Europeans or Americans.
People will realize what real wealth is. Protecting one's family and one's self, having food, having surplus to trade. People will only trade goods for things they trust, and gold is trustworthy.