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Santelli On The End Of Paper Gold's Reign
Central Banks remain aggressive accumulators of the precious metal as we noted last night, as their actions outweigh their words; but as CNBC's Rick Santelli notes today, there is a big difference between the physical bullion they are buying and the 'gold bug' trading currently going on in our markets:
I don't even look at gold as gold anymore since they securitized it. If things [went] badly in the world that I used to observe (as a gold bug); the gold would end up in the hands of the gold bugs. If things go badly now, they're going to end up with checks from ETFs! Sorry, it's not the same. The reign of [paper] gold as the Ayn Rand endgame, to me, that's over. Game, Set, Match.
Which likely explains the incessant demand for precious metals from the US Mint over the past few months - as the other great rotation (from paper to physical) proceeds.
Starting 0:25 in this clip:
Perhaps these two charts will help explain the 'difference'... Demand continues to surge while 'prices' drop...
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The instant someone uses a term like "doomer" I am gone from the conversation.
Maybe a stroll down history lane is in order for such people. Nations come and go. Reserve currencies come and go. Populations rise and fall. Nothing is forever. Just look at Detriot.
I do agree though that ZH has lost a little edge in terms of outright arguments and analysis in the comments section. The last thing this place needs to drift into is confirmation bias.
If things are fine the FED should immediately stop $85 billion in purchases per month and raise rates to 6%.
The brainwashed somehow don't see $16+ Trillion in debt or $65+ Trillion of unfunded liabilities.
Nevermind that the train has no brakes and is headed for a broken bridge, all is fine.
As long as they have cotton candy and the wind in their hair reality doesn't matter.
"My legs aren't broken, I'm just using crutches to build upper body strength."
If the economy is strong, cut the FED gravy, and END THE FED.
"My meatloaf isn't dry, it just needs lots of gravy."
Horsemeat! Bull cow pies!
Just smile and gently pat them on the head. Not all comments deserve responses.
Kaiser,
notes from the brainwashed ....would any of ya'll like to address this email from an anonymous sheep...
"Krugman nails it when he says no matter what is predicted and no matter what reality shows the doomers will never admit to faulty predictions or analysis...really, little difference between the preachers saying the world will end tomorrow----or if not tomorrow next week for sure
the stock market could go to 20000 and metal to 20 and nothing would change on zero hedge-----it would all be phony because "The Man manipulating." it's like arguing with a Christian that says Christ is coming soon. the fact that we are moving into the Spring of 2013 means nothing to a doomer-----world reserve currency still here----market trying to go to 16000---metal beat down everyday-----safeway store shelves full-----houses being sold for over list prices------no mobs in the street------not a peep of violence from any masses in the streets from SF to New York------shadow stats hyper-inflation wiping out the dollar not here..."
THERE are major preparations being made, have been made that will make most here shit Gold bricks when the whistle to "GO" is blown.There is none so blind, as those who will not see.
Mark that and see where we are in 18-24 mos.
At some point, the price of physical gold and of paper gold will necessarily have to diverge, due to the "If something cannot go on forever, it will stop" revolutionary concept.
Has anyone any idea on how this might happen, who could proclaim or edict this divergence, who could enforce it, or even what could be the spark of this explosion waiting to happen?
My guess is September 2013.
G20 meeting in Moscow may well be a game changer.
It will be a Cyprus moment, when the curtain is pulled back for a brief instant. Therefore, totally unpredictable as to when or how.
For ten days I sat amazed, A country's banks were shown to be insolvent due to poor investment in the worthless bonds of another. THE EVENT, in a fit of foolishness I assumed that reallty had slapped the illusion aside and all could see a buck ass naked empourer. Alas I now know that no Truth will shake the Grand Illusion. For if the Illusion is shattered the bottom falls out on our world. This cannot be allowed to happen, there is no sacrfice to great to impose, no amount of fabricated fiat to great to flood the world in liquidity. The alternate to this illusion is complete and utter chaos(and all the ugliness this entails). This "template" will be used till every last deposit has been used for the "greater good" world wide. Long ago, others locked us on this ill conceved path, the turn-offs are long behind us. This horse will be ridden till its body rots beneith the rider. The markets have shrugged off this minor event, new highs will be reached, the cracks exposed are being stuccoed over. I would like to thank ZH and the regular ZH'ers, for they bring me hope that I am not alone in seeing this reality denied.
At some point, the price of physica
l gold and of paper gold will necessarily have to diverge, due to the "If something cannot go on forever, it will stop" revolutionary concept.
Has anyone any idea on how this might happen, who could proclaim or edict this divergence, who could enforce it, or even what could be the spark of this explosion waiting to happen?
Physical will (as it is now) be being bought at a incrementally faster rate, and paper Gold will/have been realized for what it is.A paper promise based on nothing,but more paper.That will be the end of the ETF's.(that is what Sanitelli got right, using the wrong terminology),Gold Bugs hold physical, not ETF's.
ZH has a two charts up today on the price, and the physical.(it's manipulated all to hell,and soon, they will be unable to to manipulate it,everyone that has half a brain and money, is converting the physical as fast as possible, soverigns, the wealthy, and CB's).
When the physical is in VERY short to no supply, that will cause the Forest Fire, not a spark.
THANK YOU BERNANKE!
I wonder when will they finally fire Santelli! You can't just say the truth without any consequences!
and you can't imply that deliberate monetary policies have (unintended) consequences without inadvertently calling someone a liar. you can speak the truth and still be held libelous
Today's dystopia much like Atlas Shrugged..."mandatory contribution according to your ability, assigned allocation according to your needs"
So, a check from a corrupt ETF, that you can deposit into a Cyprus bank, isn't the same as bullion in your hand? Gee, who would have thunk?
http://www.vegasxau.blogspot.com
Hmmm. It's just so hard to figure out after 14 years of being in the PM markets. Dumbfuck kids sit and look at electronic technicals on silver because they try trade SLV or some such derivative shit and are subsequently slaughtered. I look at the premium spread on physical. I am a buyer now and bought physical today. I could give a shit less if it went to $25. Or $20. Or $15.
I think you fiat derivative lovers have some troubles coming your way soon.
Things paper have not been the same since I read a CFO Magazine piece that questioned whether corporate 'cash' is safe som years back. It seems one of the blue chips had to write off $300 million of "Cash." When Cash no longer became a certainty, I knew that my investing days were over. Since then we have had FASB 157 deception.
I think I will start raising chickens. Real ones.
Gold is on sale at last year's price.
Good, I have to buy back the tungsten I sold the last week of December in smaller increments.
What's with Liesman at the end mentioning people buying art because of inflation? Come on Stevie, there's no inflation and there won't ever be any real inflation beyond the fed's CPI calc, at least I rember you saying that all last year.
These charts are a perfect example of the "new normal".
Rick's role, as far as CNBS is concerned, is to be the crazy drunk uncle that everybody laughs at...........until suddenly it's too late and they realize he's crazy because he's been speaking truth to idiots for 50 years.
At which time CNBS will play it up like they knew it all along, since the press, like the government, ALWAYS take credit for something after the fact.
the Fed does have an advantage here, they print worthless fiat dollars and use it to buy gold bullion. you can't stop them, all you can do is buy paper gold and hedge the hyperinflation they will unleash
Liesman is relentlessly stupid.
I used to think that but now I think he tells lies to turn the listeners stupid.
Sometimes I wish I subscribed to cable just so I could observe firsthand the CNN and CNBC personalities that regularly get bashed here. I have never subscribed to cable in my entire life. Without youtube I wouldn't have a clue.
I find that we must be in a very unique time in history when record numbers of Americans,State Government central Banks such as Russia and China,even teachers' pension funds from Texas and too many other investors to mention have actually found the old,joyful and frankly great way to invest in Silver and Gold.Have you noticed the constant chatter from the old guard or old school?Your throwing your money away,your possessing an old piece of history etc. etc.Funny,I can remember when folks admired someone who had gold or silver coins or a nice beautiful necklace or ring.What in the world is wrong with all these wackos that literally hate the gold and silver investment philosophy?I've never seen so much concern from those that don't own any.What's up with that?Coo-Coo
Easy...they're brainwashed statists.
Victims of Stockholm Syndrome.
Stacking it even more here akak. Fuck'em.
A.k.a. "evil, greedy bastards."
Or they're just all pissy because they didn't get in while the gettin' was good.
They're stupid to think that PMs are done. It hasn't even gotten warmed up yet.
70 ozs yesterday from a local selling so he could repair his house. Still stacking. I don't know the future but the past is there for all to see. In the past I saw my "money" devalue...
So would all you guys that hate paper please send me, in certificate form, all your paper holdings, including your paper Federal Reserve "worthless" notes, and your Title Deeds? I'll give you a good mailing address.
I don't want to spend any, I just want to decorate my McMansion with your worth-less paper.
And, since the paper trade is worthless, is it illegal for me to spend the tidy profits I"ve made on the worthless paper bullion trades?
i think dear mr/ms/mz cognus that the majority of people here are thinking long term. so - we recommend you double down at the least, since you are such an active and genuis trader, and please do use some margin also. and please do enjoy the fruits of your genuis and spend, spend, spend (bennie would appreciate that) and since you have so much - before sure to buy some 'it's the bottom, again....' cheap slum homes. guys like you are unstoppable! go for it.
don't forget apple and facebook. they are real priceless long term investments.
Anyone care to wager on if the SP makes it's precious new high this friday?
On German tv as we speak Juncker was cornered by the reporter about banking/gdp ratio's in Germany and Luxemburg.Junckers voice was trembling and he became sweaty... To me it looked like an open mainstream attack on Luxemburg. Something is up.
they're busily denying whatever, which means they have moved onto the gangplank
http://www.usnews.com/news/business/articles/2013/03/27/tiny-luxembourg-...
It was not a normal interview, more like an attack with hard facts, sarcasm and a really uncomfortable Juncker. Another step in the dismantling of the union, on purpose. That's what it looked like to me...
You can bet though, it's being dismantled in order to be re-mantled to their liking.
Broken eggs, omelets and all that.
--Junckers voice was trembling and he became sweaty...
That's odd, I thought he was a good liar.
;-) they all go down. And they know.
it's getting really serious, maybe?
Just not a very good politician.
He needs to take Hitlery's refresher course entitled "They're dead! What does it matter?"
It's only noteworthy when they inadvertently blunder into the truth as Juncker or Dieselbloem. (not implying she did that, in fact, reflexive politician's feint.)
Ohhh ya....Increase in demand for 3 straight months. We're on a roll. And what about the stuff in shops. Ebay etc. All being hoarded.
Sooner rather than Later there's NOTHING left to buy......Very little supply left now. Get it while it's on sale......
Obviously I was in a PM buying mood today. I looked at Russian silver all day. Not a deal to be had. I had to retrieve one of my KM books because I really liked something I saw and needed numismatic information that is NOT PUBLISHED ONLINE. It Warn't cheap. I have to see the coin face to face for something like that.
Upon putting the KM library back on my bookshelf, I noticed that another book from above had fallen almost exactly into the place previously occupied by the KM book.. That book's title: "For Whom The Bell Tolls".
Prescient.
The bells have been ringing for years. Can you hear them?
I asked a sort of dumb question about how much gold will the farmer want to trade a 3kg free range chicken. The answer is the free market will set the amount.
Well the real answer is, "what's it worth to ya?"
Marginal buyers, and marginal sellers, providing price discovery for time immemorial.
if there are any free markets. aren't many right now, and getting less.
when obama owns all the chickens, and has allowed you to get 'paid' in eggs to raise them until he deems that needs them, no more free market.
it has happened before.
but - i think krugman is right. gold is a relic if central banks aren't buying it and nobody wants it. right? and i think all those picasso's i bought, i'll probably use them to wrap some fish, because central banks aren't buying picasso's anymore.
oh. except in the last decade, some central banks were stealing picasso's? is that so?
gee. well - good thing krugcrap is always so right and history will never repeat itself.
lot's of sarcasm from lots of fun if you don't know what i'm getting at.....
i just had another really scary funny thought. you thought bill/hill wanted to be a tag team. well guess what. if big bad bama can't change the laws (he did pretty good to the birthers to start with) to get 3rd term - i'll tell you who's gonna run and win. baa-moo. yes. the wife. and hillary will throw everything behind her - and the 47% of the country out on assistance and the entire rainbow coalition will back it.
and she'll win.
Rick has finally caught on...
A gold ETF is only as good as the fiat which backs it.
The same for your COMEX contracts (containing a fiat payoff clause).
(If you know an ETF d/n have physical possession of enough gold to distribute, then what is the ETF share actually worth? How do you value a share knowing you won't get PM when the music stops? I guess the answer is don't get left holding the bag.)
I am wondering if the eminent Dr Krugman is not one of the Durdens playing the devil's advocate.
Lets indulge in some pre-enlightenment thinking:
Perhaps the real Dr. Krugman is the real Devil's advocate...
Dr. Kragmun, I know that elitists think they know better than everyone eles what's best for everyone else. Central planning becomes the vehicle to 'do good' for everyone. There is a problem with this: if you are a sheeple and do what the central planners tell you to do, then you probably will prosper, at least a little. If you don't do what the central planners tell you to do then you will lose. So, effectively, to prosper you have to take orders. I don't know about you but I prefer to be independent and let the laws of nature do their thing...I woild rather be a free man and have an unfettered market that has no manipulation and take my chances than to be a sheeple that has to follow the masters. The other thing is that for all the things you know its smart asses like you who will never admit what they don't know and what you don't know is what's going to fuck it all up. At best you can be in harmony with mother nature, but you will never beat her. Remember that when you espouse your wisdom, because some day the laws of the universe are gonna kick your ass.
LOL, we have Krugman and Sptizer, all we need is Obama and Jack Jew.
I bought a 3 bedroom raised ranch in a NW chicago suburb in 1998 due to job transfer from Cinti OH. 168k. Now appraises 135 give or take so I have been paying 6800 a year in property taxes plus homeowner insurance to have the privelage of losing 3 k a month for 15 years in real value. My mother-in-law bought a new construction home in a DC suburb in 2000 for 200k that now appraised for 480k. It is time for we the people to wake up. I have enough cash in a bank to pay monthly expenses and need said account only to fulfill direct deposit requirements from employer. Think of that concept for a minute and where did that idea come from originally???? With a bank holiday your pay isn't even going to be accessible right? Wake up America.
The next major price move for silver will be either a drop to under $10 or a spike to well over $50.
I'm betting on the latter.
Going way out on a limb with that prediction eh?
paper gold is an oxymoron, anyone who had any suffers from cognitive dissonance.
try kicking a paper can see where that gets ya
The french tried unlimited stimulas with the assignants.
Napoleon went back to paying with only gold.
The rest is history
plus ca change.....
we few, we happy few, we band of silver holders . . .
If japanese rates go to 2% 80% of budget goes to interest.
Then will it matter?
Will they ever go to 2%? Or will they print to keep them down? What will the Japanese population do everytime they get a little cash? Spent it as quick as possible. Or buy some Gold Dust. Eventually Weimar again.
Amigos, compadres, paisanos and gusanos... the paper market in Gold isn't even close to over.
Why? Quien?
Porque, not a fiat soul here understands the dire need for todos powers to have the existing system to stay in place for several mas anos.
Por favor, me Zerohedgehogs... ayudame. I need you to do some sigil magick with me so that me, you, and the other luchadors can buy at lower prices. We can't let the Chinks, Ruskies, Mediterranean Mexicans, ZionXalapaLuchadors, LBT, JPM have all the fun.
Sigil magick works de dos direcciones… embedding a command (directiva) into the subconscious that is not recognized, y tambien, by creating an energy (que lastima!, so what that the energía is ultimately illusory) that vibrates at a complimentary frecuencia to induce action.
Use sigil magick to either embed y implant a desire in another (they sell their gold watch to you), or create a direction to your own deep calabasa.
Instruciones (for ZHLuchadors in training only):
Strap your mask back on, fondle the gold you dug up from your back yare, and look at the sigil while having hot relations with a member of the audience… when you reach your pile drive moment the command will embed.
Oh, I forgot, these things you create will come and revisit you, sometimes with a vengeance, sometimes to steal your AU. So, if you wish to be a luchador for long, make sure you start small or you WILL be torn apart from that which you unleashed.
Oh, and how does it feel to be a sigil yourself!?
In case you were wondering, many batallas occur between gold and paper fiat money, master y servant, creator y created, man and robot, thought process and thoughts. No outcome is assured. Sometimes its mutual destruction. Aye aye aye!
Viva El Luchador!
http://www.askchumba.com
+1 for latino-esque incomprehensibility.
Don't bother to respond jefe has died of Autoerotic asphyxiation, que lastima
All you guys wasting your comments on Mr. Krudman: Why bother? The guy is either stupid and just really doesnt get it, or just having alot of fun with your comments and is just fucking with you cause you care enough to let him.
I know holding gold is key.....and I now have a new favorite place to see live gold prices! Gold Price Girls! But as far as Santelli is concerned, its definitely not Game, Set, Match. Physical demand continues to increase. The losers from GLD are the miners, not the physical holders.
And for those of you who like beautiful women:
http://www.gold-price-girls.com
Three month graphs are not particularly meaningful in this case. Do 3 yr or 5yr or 20 yr graphs tell the same story?
The blog FOFOA speculated about this. With all respect to both that blog and Santellli, there are limits to fractional reserve precious metals. Physical in your hand beats paper in your account any day.
Don't forget this Krug, you won't hear this in media or from the pols.....A majority of the 'poor' don't want to work, they're conditioned by our dis-educational system to resent everything about it. I love it when you libs throw little tidbits of false info into a discussion, as though it's true just because lots of pointy heads like you say it is.
Walk a mile in my shoes dude, 'That dog won't hunt'.
Gold and Silver will be important all the way up till the end of the earth. It's importance is mentioned in the book Revalation.
The Bible says in the end people will hate their gold and silver and throw them in the streets. Food is where it's at, according to the Bible. It says in Revelations that in the end people will pay a whole day's wage for a small jar of wheat.
+1 Mr. Hudson, yes, Rev says at the END it's (gold/silver) thrown into the streets, and it's saying essentially "One days wages for a HALF loaf of bread's ingredients".
I didn't see this article till just now, but great graphs.
I wrote a similar article to Santelli's thoughts on gold about silver today:
Silver Eagle And Junk Bag Shortages Show Underlying Strength Of Silver Market Demand
http://bit.ly/15WoeLA
Things aren't what they seem.
Practically speaking, gold ETF’s and the futures and options they are largely invested in are derivatives. That alone should be a big red warning sign for investors in these paper products. The irony is that trade in these derivatives set the price of the physical metal. As it often happens in a world dominated by financial markets, the tail is wagging the dog because the tail is 100 times bigger than the dog.
You mean people didn't actually physically take their precious metal investments in hand? opted for paper cert?
the eff you say?
Someone -should- rob them just for being that stupid.
Don't knock gold ETF shares, at least it's a form of gold-based currency. In contrast to FRN's.
The way some news sources tried to spin Santellis eant was, do not buy gold when what he really said clearly was do not buy gold certificates of ownership. Sadly there seem to be many that do not know the difference.
Sadly these charts are utter shite. Go back to statistics school.
I'm all for silver n gold bitches, but it is misleading to compare cumulative supply against daily price without explanation.
It's sad that ZH is resorting to cheap parlour tricks to generate page clicks. Poetry. :-)
Paul Krugman's satire here is pretty top notch, but I think Ben Bernanke's satire is far better, and more comical. www.facebook.com/deepthoughtsbybenbernanke