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 - 15:58 | 3282929 LawsofPhysics
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Santelli works for a bank brokerage.  He will be just fine.

Wed, 02/27/2013 - 15:50 | 3282897 SheepDog-One
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On a side note, apparently the only thing now needed to create a 4% or so upswing in equities is to have one of the liars speak...Bernank or ObaMao or whoever will do...even Boner.

Wed, 02/27/2013 - 15:54 | 3282914 outamyeffinway
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Can you say "Mississippi South Sea Bubble"? Getting frothy up in here!

Wed, 02/27/2013 - 15:54 | 3282915 agent default
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Well gold and silver are still getting hammered today, so I suppose that these ETFs are working exactly as intended. 

Wed, 02/27/2013 - 15:55 | 3282919 fonzannoon
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"there's only a few people who really want to own gold bars....and how many coins do you want to have?"

Fuck you you fuckin empty can cocksucking piece of shit whore.

Wed, 02/27/2013 - 16:02 | 3282947 akak
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"there's only a few people who really want to own gold bars....and how many coins do you want to have?"


Wed, 02/27/2013 - 21:22 | 3284043 WmMcK
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"Just a little bit more" - Rockefeller

Wed, 02/27/2013 - 16:05 | 3282959 Shell Game
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This is one of those time I want to up-arrow 100x.  The propanda is relentless - from the use of language, the attack on price to the illusion of wealth fiat debasing brings.  I hope they and their paper conflagrate..

Wed, 02/27/2013 - 19:27 | 3283687 August
August's picture

A constant feature of propaganda is that it is and MUST BE relentless.  That's why it works.

Wed, 02/27/2013 - 22:42 | 3284233 LongBallsShortBrains
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Wed, 02/27/2013 - 15:57 | 3282924 irie1029
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Hmm.  I just learned somethnig....  That is what I love about this site.

Wed, 02/27/2013 - 16:23 | 3283041 4Y_LURKER
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Irie XIV? 

Wed, 02/27/2013 - 16:01 | 3282936 israhole
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GLD is for the goyim.

Wed, 02/27/2013 - 16:20 | 3283026 Pseudo Anonym
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and for the jews to sell it to goyim

Wed, 02/27/2013 - 16:04 | 3282953 HD
HD's picture

It's getting beyond desperate. S&P in orbit, vix hammered, metals hammered - EU "fixed" because Italy sold some bonds.

There is a deep rot - the smell of an old animal about to die.

For once, I think TPTB are afraid...they can't even let the market decline 2% - now why would that be exactly?

Wed, 02/27/2013 - 16:09 | 3282982 mayhem_korner
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They are extremely desperate, but they can keep the top spinning a little while longer.  The real issue is when the first major creditor blinks - maybe China wants to horde a few more tons of bullion before they start the ultimate bank run...  Until then, we are made to suffer the waxing of the blind and bought-off.

Wed, 02/27/2013 - 16:13 | 3283005 HD
HD's picture

When they push this to new all time highs - and they will...

They believe retail will rush in (with money they don't have) - instead they are going to start asking WHY and HOW are we at all time highs?

Wed, 02/27/2013 - 16:20 | 3283024 mayhem_korner
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The last time the Dow was at 14,000 (Oct. 2007), gold was $700, gasoline was $2.80, the Case-Shiller index was 199 (145 now), silver was $13, unemployment was 4.7%, food stamp recipients were ~27 million.

The all time high is a Long, Long ways away from what these chumps are going to get drunk over...

Wed, 02/27/2013 - 16:33 | 3283086 youngman
youngman's picture

If all those gold and silver options that are outstanding ak for their gold delivered..its party over I think...and I think that is how it will happen..China will buy thousands of options and ask for delivery....done..Comex and Lbma will be cooked goose...

Wed, 02/27/2013 - 22:44 | 3284240 LongBallsShortBrains
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Crashes seem to wait until after large option positions can be reversed. By the you know who people.

Wed, 02/27/2013 - 16:15 | 3283011 agent default
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The animal is already dead and swollen.  That thing you smell is the carcass about to rapture, the fine perfume of decay will only get stronger.

Wed, 02/27/2013 - 18:02 | 3283381 Umh
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Long before I rounded the bend of the river I could smell the stench. The damn bull died and fell into the shallows. I felt the smell as much as anything. When we finally got upwind I breathed deeply and coasted down stream.

Wed, 02/27/2013 - 21:56 | 3284137 Bunga Bunga
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The name of that smell is "central planning". Don't try to understand anything, just enjoy the fiction.

Wed, 02/27/2013 - 16:05 | 3282956 rubearish10
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Partly off topic but today's market performance (stock ramp and PM dump) could only mean blowout GDP revision tomorrow and path to growth happinesee and never a crisis ever again! Smell the roses?

Wed, 02/27/2013 - 16:07 | 3282970 HD
HD's picture

If the big banks knew something like that they would sell it off hard now and ramp the hell out of the futures tonight. Not like the SEC would notice.

Wed, 02/27/2013 - 16:11 | 3282992 rubearish10
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Sorry but cannot agree with that since an overnight move would be a multiple of today's. If you're talking big banks, it means large size and you just can't trade that way AH, period. If you know something, you act, you don't wait.

Wed, 02/27/2013 - 16:05 | 3282962 Acidtest Dummy
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"Good as gold" is always hyperbole.

Wed, 02/27/2013 - 17:46 | 3283325 MillionDollarBoner_
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As good as gold

The golden rule

Everything that glisters is not gold

Gold medal

Fuck it...there's thousands more here:

CNBC Talking Heads v centuries of culture: who you gonna bank on?!?

Wed, 02/27/2013 - 20:23 | 3283866 Acidtest Dummy
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Alright alright, a rain in May, a friend on the road, a story well told, a good reputation, land, the earth, felicity and time. Are all "as good as gold." I stand corrected.

Fun link BTW MDBoner, thanks. I especially liked #34 Gold does not fear the furnace.

Thu, 02/28/2013 - 09:59 | 3285393 L_Conquistador
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Thanks for the link.

"Where gold avails, argument fails."

Wed, 02/27/2013 - 16:08 | 3282969 ebworthen
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Love it.

Yes, actually holding something tangible instead of paper.

Our messed up society is based on promises, and those promises are being broken left and right, only to be followed by more promises, which are then VAPORIZED.


This is why Gold, Silver, Guns, and Ammo are selling like hot cakes - they are TANGIBLE, and they are REAL; they are not a hollow promise from Washington or Wall Street.

Wed, 02/27/2013 - 16:09 | 3282983 PUD
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Can you eat gold? I thought not. It's a rock...hello?  Made "valuable" only by the perceptions of men.

Wed, 02/27/2013 - 16:16 | 3283013 mayhem_korner
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Yes...because man cannot exist sans iPad, Instagram, and Googlemaps.

Stop and think (if you are capable of such) for a moment about what the "aware" crowd stocks up on: food, water, fuel, ammo, sanitary items, etc...and...wait for it...precious metals.  What do ALL of those things have in common, other than I can touch all of them within 30 seconds of where I sit?

Wed, 02/27/2013 - 16:23 | 3283040 THECOMINGDEPRESSION

There is ALWAYS an uninformed ignorant person in a group of 2..

Wed, 02/27/2013 - 17:14 | 3283244 Mad Mohel
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The dumb sonofabitch has 8000 Big Macs in reserve. He's rich bitch!

Wed, 02/27/2013 - 16:23 | 3283043 agent default
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But you can sure as hell eat that funny paper the Fed is peddling.  You won't even be able to exchange the damn thing for anything of value in the not so distant future.

Wed, 02/27/2013 - 16:24 | 3283047 20834A
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Can you eat paper? Can you take that stock certificate from ConAgra to the grocery store and get scarce foods? But with a wink and a nod, I'd bet the store owner/manager would do a quiet deal for gold.

Wed, 02/27/2013 - 16:26 | 3283058 Shell Game
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Think about it.  Imagine if money literally was food or even backed by food.  Hoarding, forex exchange rate nightmare, etc.  Yeah, monetizing debt is a shit idea, but monetising food?  Soilent greenback, what could go wrong... 

Perceptions.  Is there anything more important for honest money than perception and trust?  This is why the very low velocity, light industrial use of gold is perceived as the store of value extraordinaire.  


Wed, 02/27/2013 - 16:52 | 3283153 ebworthen
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I'm certain that 144,000 people who had paper promises from MF Global and Jon Corzine wish they had Gold instead.

Can you eat equities?  Can you cash out equities without getting taxed out the ass, if they still have value?

Come-come now, diversify, and dip your toe in a little Gold and Silver.

Wed, 02/27/2013 - 17:13 | 3283241 Charles Nelson ...
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you're posts are about as fun to read as getting gonorrhea from a fat whore

Wed, 02/27/2013 - 17:33 | 3283293 TheCanadianAustrian
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How does one read the getting of something?

Wed, 02/27/2013 - 22:50 | 3284250 LongBallsShortBrains
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I up arrowed you because I am wise enough to know that I need SOMEBODY to take the other side of my trade.

Thu, 02/28/2013 - 01:27 | 3284695 Diogenes
Diogenes's picture

"Can you eat gold? I thought not. It's a rock...hello?  Made "valuable" only by the perceptions of men."


You can't eat paper either but you can wipe your ass with it.

Thu, 02/28/2013 - 05:24 | 3284971 HyperinflatmyNutts
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PUD I think u have been pulling it far to long..  

Wed, 02/27/2013 - 16:11 | 3282995 mayhem_korner
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Gold is being bought en masse - GLD is being sold off en masse.  That's the difficult-to-perceive spread that tells the real story.

Wed, 02/27/2013 - 16:08 | 3282971 PUD
PUD's picture

Once one 'invests' in gold. You speculate in it. Period. The word "investor" is the most tainted word in the english language now...propaganda for the masses. It is all gambling. Be honest with yourselves and you won't feel so bad when you lose all your chips

Wed, 02/27/2013 - 16:13 | 3283002 mayhem_korner
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I don't invest in gold.  I store purchasing power there.  Has never failed in the history of mankind.

Wed, 02/27/2013 - 16:33 | 3283084 Shell Game
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What are the odds that PUD (24 weeks, 4 days) has so recently decided to start commenting on Zerohedge?  I smell a provocateur..

Wed, 02/27/2013 - 17:16 | 3283250 Mad Mohel
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Ehhh I'm going to bet on misinformed piece of shit.

Wed, 02/27/2013 - 17:37 | 3283308 shovelhead
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They only hire bloggers that can produce a cogent and believable argument.

This does not include a nit-wit who would rather have a McD's quarter pounder than 4 oz. AU.

Do NOT follow this link or you will be banned from the site!