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Santelli On The Securitization Of Gold

Tyler Durden's picture


Having started trading gold futures over 30 years ago, CNBC's Rick Santelli has seen a few changes over the years. From its true high in Feb 1980 at around $2300 (inflation-adjusted), the biggest shift he and his guest have seen is the evolution of ETFs and the implicit securitization of gold. This took the 'complication' out of trading gold and enabled those who did not wish to hold physical to participate. But Santelli asks the critical question, "didn't it take the whole point away [of investing in gold]?" From the 'old days' when gold and silver were physically held and passed down and considered wealth to the current incorrect belief system of paper gold, the myth-shattering-Chicagoan exclaims to the precious metal ETF holders, "for the Ayn Rand'ers, if the financial world comes to an end, you're not going to have the gold, you're going to have a piece of paper."


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Wed, 02/27/2013 - 15:42 | 3282858 bank guy in Brussels
bank guy in Brussels's picture

Golden fire and brimstone today from the great Jim Willie -

Fabulous stuff -

How the framework for international trade settlement in gold rather than the US dollar is already in place

How Germany is aligning with Russia and China, ready to 'swing' from West to East in the new world arrangements of gold-backed trade

Why China and Russia have 5 to 10 times more gold than they admit

Why Hong Kong is the safest place to store gold

How the West is sabotaging mining stocks, and people should own true physical gold instead

How JP Morgan interest rate swaps are fabricating 'demand' for US Treasuries to keep yields low

« The US citizens remain the worst informed people of any industrialized nation, and the most subjected to propaganda. »

« JPMorgan runs the Iraqi Export Bank in Baghdad Iraq, which serves as the clearing house for Afghan narcotics »

« The Zero Percent Interest Rate Policy will remain in place until the USGovt debt default occurs. » And the US dollar dies.

Always terrific reading


Wed, 02/27/2013 - 16:10 | 3282988 DavidPierre
DavidPierre's picture

A four part History Channel pile of bullshit...

Now CNBC's Rick Santelli... again... and again ... and again.

Come on TDs tighten up your game.

Where is Jim Willie's soapbox on ZH for christsake?

Wed, 02/27/2013 - 16:17 | 3283007 Pladizow
Pladizow's picture

Own gold for "price appreciation" - WTF CNBS!?!

You own gold because you have money, not to make money!

"Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked: 'Account overdrawn."  - Ayn Rand

Wed, 02/27/2013 - 17:26 | 3283272 nope-1004
nope-1004's picture

ETF's were invented to supress gold and silver, therefore monetary malfeasance goes on undetected.  Doesn't take a genius to see that the big banks are completely insolvent, the UST completely ponzified, and PM's held in check by ETF's to keep a lid on the money printing to keep the insolvent ponzi going.  It's also clear the TPTB fear change.  Well, in todays world, that's pretty naive.

So far, the invisible hand has worked - on paper.  My bet is it won't last forever.  Position yourself accordingly.


Wed, 02/27/2013 - 21:37 | 3283966 GetZeeGold
GetZeeGold's picture



ETF's were invented to suppress gold and silver.


Exactly right. Have the real stuff and have it in hand. Everything else is paper.


Wed, 02/27/2013 - 22:21 | 3284190 LongBallsShortBrains
LongBallsShortBrains's picture

How people don't put together what the USA did by closing the gold window in exchange for paper is exactly the game that they are trying to reintroduce???

Paper gold to secure against runaway gold prices!!!

What was the reason before?.... Here, we will give you a pie e of paper saying that your gold is safe here on deposit, and that we won't print up any other deposit slip for your gold. It will always be here.

How in hell is this any different?

Sheep are meant to get slaughtered. I got a new saying:

Start slaughtering, Lay down and get slaughtered, or get the hell out of the way!!!!!!

long physical short paper. Wish iwas longer, but my boating skills need improvement.

Wed, 02/27/2013 - 17:24 | 3283273 James_Cole
James_Cole's picture

Ayn Rand is great for 12 year olds who want to read funny nonsense written by a zealot, why she has followers outside of preteens is one of the mysteries of life.

"Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to be the tool by which men deal with one another, then men become the tools of men. Blood, whips and guns - or dollars. Take your choice - there is no other - and your time is running out."

Luckily no one in history has ever considered combining any of these, so take your pick!

Since Mckinley America has garnered wealth through imperialism abroad, before Mckinley it was done through conquest / exploitation closer to home. Same old story regardless of Rand's nonsensical rants. 

Wed, 02/27/2013 - 17:48 | 3283329 Pladizow
Pladizow's picture


Wed, 02/27/2013 - 17:55 | 3283347 Umh
Umh's picture

So you like being the beneficiary of imperialism, and rejoice in the explotation of others.

Thu, 02/28/2013 - 00:48 | 3284616 Diogenes
Diogenes's picture

"So you like being the beneficiary of imperialism, and rejoice in the explotation of others."

The very wealthy who own the United Fruit Company, the big banks, and other big business interests benefit from imperialism. The taxpayers pay for it with their money, the taxpayers sons pay for it with their blood.

Thu, 02/28/2013 - 07:50 | 3285098 GetZeeGold
GetZeeGold's picture





Clean up on aisle 5.


Poor lil fella's head just spontaneously exploded.

Thu, 02/28/2013 - 04:27 | 3284913 e-recep
e-recep's picture

I respect Ayn Rand mostly because she detests faith and religion and values reason instead.

Wed, 02/27/2013 - 18:01 | 3283371 fomcy
fomcy's picture

The main problem is that while strugling to curb costs of Inflation Gold miners, giving up

the REAL thing (Metal) for the Fraud Paper at the $ fake spot price.

Wed, 02/27/2013 - 16:40 | 3283108 in-Credible Banker
in-Credible Banker's picture


 The "great" Jim Willie.  WTF has he done? 

Turd.  Harvey Organ.  Santelli.  Max Keiser.  Sprott.  "Santa".   Day after day....week after week, month after month.  All of them spouting the same shit all the time.  The COMEX is gonna blow.  The gold isn't there.  The dollar will be dead.   Blah blah blah.


Sick of it all.  And it makes me vomit on a day like today where my metals drag the porfolio down when everyone else is celebrating the latest 1.5%. 





Wed, 02/27/2013 - 16:56 | 3283176 kliguy38
kliguy38's picture

This game seems to be a little too tough for ya fella....... take your Bra and panties off and relax

Wed, 02/27/2013 - 18:02 | 3283264 akak
akak's picture

Actually, In-credible Banker here expresses an opinion that I find very meaningful and revealing.

What if the prices of gold and silver are in fact being manipulated, not necessarily to the downside solely or directly, but in such a way as to dispirit gold and silver holders by creating excessive volatility, via excessive price spikes followed by prolonged declines and/or equally prolonged and grinding, inconsequential sideways movements? 

Think about the differences in psychology and expectations that would be engendered by the following two scenarios, both ending up with the prices of gold and silver in THE EXACT SAME PLACE:

1)  The prices of gold and silver move up on an almost steady and linear upward-sloping graph, with occasional and expected corrections of a few percent along the way;

2)  The prices of gold and silver, after grinding sideways for a year or more, suddenly begin to shoot up in near parabolic fashion, making investors both excited and nervous, only to be followed by a dramatic 30 or 40+% decline, or a series of downward steps accomplishing the same thing (I don't know which would seem, overall, worse to the average investor or PM holder), followed by an equally long and boring plateauing of prices.

Now, if TPTB did in fact have the power to manipulate PM prices in the short and medium term, but only on a limited or insignificant level in the long term, would it not be to their advantage to at least put scenario #2 into play, in order to dramatically increase (artificial primary, and 'natural' second-order) volatility in the PM markets, thereby discouraging PM holders and investors, as well as giving the PMs a black eye as "highly volatile" and "excessively risky"?  Note that this ploy could work brilliantly in suppressing interest in the PMs, even as the eventual rise in their prices remained close to or exactly what it would have been absent the manipulation.

Is not #2 in fact the exact scenario we have seen, at least three times, in the last five or six years?  And curiously, precisely coinciding with the advent and popularity of the gold and silver ETFs.

Wed, 02/27/2013 - 21:36 | 3284088 kliguy38
kliguy38's picture

"but of course" that is the game my friend

Wed, 02/27/2013 - 22:25 | 3284200 LongBallsShortBrains
LongBallsShortBrains's picture

Hang on to winners

Push the losers overboard.

Add to winners


It ain't that hard

Take some profits too once in a while, you deserve it.

Thu, 02/28/2013 - 04:10 | 3284900 Ghordius
Ghordius's picture

+1 akak. ties in with what I'm writing here from time to time: what trading desks really love is waves. "churn", I call it. or if you want to use a gay term: drama

in the years before 1929 it was a bit more straightforward, pools gathered to push a stock up and then cash in when the masses got in

nowadays they can profit from every movement - up or down is irrelevant

it's akin capturing the energy of the seas - the result is the same: fleece the masses of small investors

in the gold and silver arena of course, it's additionally important for them to dispirit anyone that tries to have a stable savings level - a saver in fiat get's fleeced by inflation, a saver in gold or silver has to be fleeced differently

Wed, 02/27/2013 - 17:35 | 3283296 James_Cole
James_Cole's picture

The "great" Jim Willie.  WTF has he done? 

Turd.  Harvey Organ.  Santelli.  Max Keiser.  Sprott.  "Santa".   Day after day....week after week, month after month.  All of them spouting the same shit all the time.  The COMEX is gonna blow.  The gold isn't there.  The dollar will be dead.   Blah blah blah.

All these guys make money from either stock promotion or directly through their own ETFs, so consider the source. If you're in these markets it's a good idea to hedge your positions and take profit when the opportunity presents itself. I say this on here all the time and get down-voted but read the actual numbers on gold and try to cut out the noise. 

If you think your portfolio is getting hit though, take a look at Sprott Asset Management ETF performance & be thankful you're not paying those guys to lose your money - it's no surprise he's coming out with crazier and crazier excuses.

Wed, 02/27/2013 - 21:44 | 3284107 horseman
horseman's picture

I used to have some money with the "great" rick rule so I could get in on all that inside resource expertise at an extremely expensive commission rate.  Nearly everything I was recommended went down,,,substantially.  I finally moved my money.


Wed, 02/27/2013 - 21:57 | 3284135 James_Cole
James_Cole's picture


Thats interesting as my introduction to him was watching him and his buddies hard selling a convention of (let's say 'less savvy') investors on a particularly gawdawful 'mining' stock. I was wondering to myself how such clownish stock promoters were winning the crowd so easily? It was later that I found out they were all known & held to high esteem to particular circles of online goldbugs. 

Anytime someone is giving / selling you financial advice, consider the source very carefully. 99% (pulled this number out of my ass but its probably true) of financial advisors make money solely on commissions. 


Wed, 02/27/2013 - 17:36 | 3283301 AllThatGlitters
AllThatGlitters's picture

Well, you had your chance to buy Groupon today. Did you? It is down over 20% AH on an earnings miss.



Wed, 02/27/2013 - 21:29 | 3283905 FEDbuster
FEDbuster's picture

Still looking for a 50% off gold and silver bullion Groupon deal in my email.....

Kyle Bass on the paper gold magicians at COMEX:


I would like to thank the paper gold and silver price manipulators for pushing down the price for awhile while I buy more physical. 

Could you please do the same for the ammunition market, even though there is no paper ammo market?  Fucking DHS is exceeding their three box limit.

Wed, 02/27/2013 - 17:13 | 3283242 Stock Tips Inve...
Stock Tips Investment's picture

I think today there is a belief that the price of gold is being manipulated. I have the impression that the real smart money is buying gold at current prices. For what purpose? Defender financial strength in the case (very likely) that the plan of Ben and his friends finish failing.

Wed, 02/27/2013 - 21:34 | 3284084 WmMcK
WmMcK's picture

Au is again trading above par to Pt if anyone cares.

~ 55:1 to Ag for either.

Still waiting for 57.5 (or 51 to go the other way)

Thu, 02/28/2013 - 11:42 | 3285808 tango
tango's picture

LOL - I see the conspiracy/manipulator theme endlessly on ZH even when it makes no sense.   Why would Russia, China, etc so ardously purchase gold only to then turn around and try to depress the price?  And if pricing is so easy (as many seem to think) why isn't it done constantly, i.e. drive gold to $1000/buy, drive up $200/sell, drive down $100/buy - repeat ad infinitum.  In other words, why do the believers in direct manipulation ONLY come out when gold rises?   Like oil and "traders" (only when it rapidly rises in price).   The market is so complex, with so much artificiality, false perception, fakse pricing and hokum that finding true value has become a big guessing game. 

Wed, 02/27/2013 - 21:30 | 3284064 WmMcK
WmMcK's picture

Always terrific reading --

Definitely, but for some reason I greatly prefer his writing to his speaking.

Wed, 02/27/2013 - 15:45 | 3282873 McMolotov
McMolotov's picture

The Shitty Golden Rule: He who prints the gold makes the rules.

Wed, 02/27/2013 - 15:55 | 3282920 Supernova Born
Supernova Born's picture

Gold didn't have counterparty risk, so banksters found it necessary to invent it.

Wed, 02/27/2013 - 16:02 | 3282942 redpill
redpill's picture

At some point the divergence between phyz and paper will be so large not even the dumbfuck cnbc hosts will be able to ignore it.

Wed, 02/27/2013 - 16:05 | 3282954 Manthong
Manthong's picture



There once was a trader named Sid

Who worked ETF’s for the Squid.

He smiled as he thunk

We’ll be out of this junk

On the day that it all goes “no bid”.


Wed, 02/27/2013 - 16:11 | 3282984 McMolotov
McMolotov's picture

Before phyz and paper become completely decoupled, though, they'll probably crater the paper price and pull physical with it as much as possible to scare out weak hands and allow the big boys to swoop in and buy physical on the cheap.

Wed, 02/27/2013 - 22:38 | 3284224 LongBallsShortBrains
LongBallsShortBrains's picture

I was thinking false flag aka terrist attack on the comex vaults.
"We had your gold til the towelheads blew the place up"
"If people want their gold back, then the terrists have won"

But it will indeed be something nobody could have see coming that caused something to happen, which we all can foresee. Hmmmmm.

Wed, 02/27/2013 - 17:05 | 3283212 Solon the Destroyer
Solon the Destroyer's picture

The whole point of gold ETFs is price suppression for physical.  Provides a retail outlet for demand where matching supply is not required.  It's a retail fleece, and to make matters worse, eminently more trackable and thus taxable.

It also allows the big players to bang down the price in paper and buy cheapened physical to cover later shorts, playing the long leg in the big picture, and accumulating accumulating acculmulating along the way as cheap as possible.  Sell paper and buy Phys on the way down, buy paper on the way back up, buy covered shorts, sell paper and hammer it back down... rinse, repeat.

Wed, 02/27/2013 - 17:59 | 3283367 XitSam
XitSam's picture

Nope. They will still ignore it. Because it would mean that their world view was fundamentally flawed, they will have nervous breakdowns or psychotic breaks rather than admit it.

Wed, 02/27/2013 - 16:06 | 3282964 kliguy38
kliguy38's picture

Correct and they recommend it daily through their Media pumpers like Cramer and the rest of the CNBS cast. GLD GLD GLD.....then they pump the GDX and GDXJ....hehehehe.......suck all of that liquidity into more paper traps....and for now its working like a well oiled machine......ahhh but therein lies the problem......for now....note that Soros pulled his GLD out......he knows full well its a killing field 

Thu, 02/28/2013 - 05:16 | 3284966 HyperinflatmyNutts
HyperinflatmyNutts's picture

I agree with u Kliguy, but as far as Soros go.  He sits there and announces that he has dumped a truck load of GLD.(aka paper) the Sheeple follow him like lemmings. The spin machine cycles up,But what we dont know and I am only guessing here. Is that in one hand he dumps the paper.  Price drops. In the other hand he is buying Physical on the drop.  Funny how we know how much GLD he has but, he does not reveal his Physical holdings!

Wed, 02/27/2013 - 17:58 | 3283355 Umh
Umh's picture

It's harder to rehypothecate what's in my hands.

Wed, 02/27/2013 - 15:49 | 3282884 SheepDog-One
SheepDog-One's picture

Oh, they're 'securitizin' the gold now...yea whatever.

I wouldn't trust a damn thing except some guns and ammo in this full-retard world we've become.

Wed, 02/27/2013 - 17:38 | 3283310 MillionDollarBoner_
MillionDollarBoner_'s picture

I just love that "securitizing" sounds so...so...secure...;o)

Wed, 02/27/2013 - 15:49 | 3282891 Michelle
Michelle's picture

Ayn Rand'ers don't care about no stinkin' charts! Gold stackers don't care about paper profits! BTFD!




Wed, 02/27/2013 - 15:49 | 3282892 kralizec
kralizec's picture

Paper, good for butt-wiping, and that's about it.

Wed, 02/27/2013 - 15:55 | 3282921 redpill
redpill's picture

And burning.  Combine the two and you get quite the smell.

Wed, 02/27/2013 - 16:05 | 3282946 McMolotov
McMolotov's picture

"It's quite pungent. It's a formidable scent; it stings the nostrils in a good way."


Wed, 02/27/2013 - 18:11 | 3283408 sdmjake
sdmjake's picture

"They've done studies. 60% of the time it works  every time"

That is fantastic...sounds like some kinda Fed Speak!

Wed, 02/27/2013 - 16:02 | 3282893 Theta_Burn
Theta_Burn's picture

Why hold the actual gold, Dick

Looking foward to more pearls of wisdom from Dick and friends



Wed, 02/27/2013 - 16:09 | 3282981 akak
akak's picture

I have found that men named "Dick" usually are.

Wed, 02/27/2013 - 15:50 | 3282896 beachdude
beachdude's picture

God bless and protect Rick Santelli... and 2 to 3 bodyguards when venturing out in public.

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