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"Don’t Rush For Gold" - What A Real Hard Currency Mine Looks Like
When it comes to mining for alternative currencies, there is this:
Tien Shan mountains, Kyrgyzstan
“Don’t run! Slow down! Just don’t run!” I repeated this non-stop to myself like an incantation. Indeed, it is hard even to pace quickly – let alone run — when you have to breathe in the rarefied air and wear a supplied protective helmet and brand-new rigid boots with steel toes.
I also had to look out for giant trucks the size of three-story houses chugging around. It was difficult to keep my emotions under control during the few hours on this tight assignment. I was at an altitude of over 4,000 meters above sea level near the Chinese border, inside a huge open-pit gold mine at Kumtor, Kyrgyzstan’s largest gold asset, operated by Toronto-based Centerra Gold. Gigantic trucks and excavators worked non-stop in the snow-clad pit, looking like characters from a fantasy movie. As if playing a computer game, an excavator operator elegantly manipulated small joysticks – just five scoops full of ore, and almost 200 tones were loaded into a truck in about one minute.
In line with Centerra Gold’s tough requirements, I passed two medical checks before I started working at these giddy heights. A day before, we had to stay for the night at a guest house located at about 1,700 meters above sea level to get accustomed to high altitudes before ascending to Kumtor. The gold mine is the world’s second highest-altitude gold deposit after Peru’s Yanacocha mine. Some vehicles never even stop their engines in these ferocious conditions of Arctic tundra and permafrost.
Finally, the work of hundreds of workers, dozens of huge machines and the state-of-art gold-extracting mill reached its logical conclusion accomplished by just two workers. Moving like extra-terrestrials in their silvery heatproof overalls and helmets, they slowly poured dazzling, bright orange molten gold from a crucible into molds.
Minutes later, four bars containing around 80 percent pure gold and worth $2.6 million were ready for polishing. A worker wearing a mask closed the curtain of his glass booth to polish a 20 kg bar inside.
I saw gold dust shine in the light of bright lamps illuminating the booth. After being photographed as though they were prestigious models on a catwalk, the four shiny bars were then stamped and sealed in massive vaults. I have seen batches of banknotes worth more than $2.6 million, but beyond all doubt, gold bars look much more attractive!
When I left the hot melting shop, I saw a crystal clear sky over the Kumtor mine outside. As our team prepared for the 400 km (248 mile) ride back to the Kyrgyz capital Bishkek, I raised my camera to shoot a final general view of the plateau. In the bright sunlight, a few tiny specks of gold dust were still glittering on my lens and camera.
By Shamil Zhumatov, Reuters
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I believe this is a final test to shake out weak hands - on a long enough timeline . . .
You people make me laugh...
~~~
Any time something is purposefully punched lower it is so that whales can accumulate at a low price... Swim with the sharks NOT with the minnows... The minnows are looking at the DOW & fucking bitcoin...
This minnow plans to sell some gold when it has risen 10x from his cost basis.
This minnow sold some bitcoin after it rose 10x from his cost basis.
Which defines you as a 'trader'...
akak! I try not to feel anything about gold anymore. I just buy it, robotically, as money comes in.
I do. Talk me off the ledge, man.
I got in late (2011, when I came into some money and wanted to protect it) so as of today I've lost purchasing power. Bernanke Bucks printed by the trillions are outperforming my gold. Been through a handful of rough corrections but never worried about it, but this one looks bad. Even Jim Rogers is saying he won't touch gold ("too many speculators") etc. Gut check time.
That which cannot be sustained, will not be sustained.
I imagine that the Russians defending Minsk, then Kiev, then Moscow, then Stalingrad before the seemingly unstoppable Germans must have felt much as you feel today. But do not give more credit to criminals and sociopaths than they are due.
Are you on margin or something?
@ devo:
Take a few minutes and read this:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/4/3_For...
Quote: "But what this is designed to do is break up the sentiment among Americans and gold bugs. It scares them. It is designed to stop the flow of money from ordinary citizens into gold"
The whole thing boils down to psychology. The Fed can't create the illusion that "all is well" in the face of a rising gold price, so they are desperate to hammer it down.
The fact that it's being done more often, and more blatantly should serve as an indication that we're close to "the end", and the crash is coming very soon.
Yeah it's a very good point, that if every average citizen had gold the FED couldn't inflate them away.
They seem especially eager to bitchslap silver and platinum this time around, too.
Unless your intention is to speculate, why stress yourself with short-term price movements? You will still have the same ounces tomorrow.
I'm upset at losing purchasing power. I know if it gains big over the next few years I'll get that back, but it is unsettling to buy "money" with strong fundamentals yet lose purchasing power. Saying the system is designed to do this makes sense and all, but there's a lot of rationalizing and group therapy among gold bugs (e.g. some guy earlier wrote "only paper gold is tanking"--really? Pretty sure I'd get near spot if I tried to sell on eBay) to make each other feel good.
I just think it's important to keep things real, and if we're going to lose purchasing power holding gold then it's time to sell. I have lost purchaing power over a two year peroid despite trillions more Bernanke Bucks during that time span, so I need to ask difficult questions and be realistic. Not going to sell, but this correction has been tough. For a lot of guys here who bought at 400 it's easy to sit tight. For me, risk/reward isn't the same.
Think of it this way...when the situation arises where you actually HAVE TO use your gold to make purchases, you'll be happy you kept it. Until then, do what I do...periodically check your stack and sleep well.
Touche.
When I used to listen to Schiff (stopped because he's horrible with social issues) a caller said his Polish grandparents stored their life savings in a wall back in Poland. When the family found it, they were hoping there was gold inside, but instead it was some old Polish currency no longer accepted and worth zero. I guess if I hold this long enough I'll be fine, just worried because I lost purchasing power and look to lose a lot more over the next few weeks, and protecting savings is the reason I bought the gold in the first place. I'm not a gold bug at all, but I am a saver.
For what it's worth-likely not much-
Gold has just back tested the Aug 20th breakout for the 2nd time-normal bull market dynamics--we'll see if it holds here-
I'm not a gold bug at all, but I am a saver.
Then Gold is definitely for you! The test of time proves Gold's ability to help people save!
I hear ya...I too have seen the value of my stack plummet. That's why I keep some fiat in the rainy day fund, but I look at PMs as the armageddon fund.
Best of luck
if you are that freaked out sell 20% of your gold and buy bitcoins or a goat or whatever you think will help you retain some wealth.. the fact that you have SOME gold is way more than most
Your trepidation is understandable. I've been a buyer since the mid 1990s. If you think it was easy to buy when the price passed $500, you'd be wrong -- very wrong. I thought I must be totally nuts to pay that much. You'll feel the same when you buy at any current price. You'll be glad you did when the price reaches its true value. Ask any random person why they don't buy gold at every opportunity and they'll tell you it's too expensive. You get the same answer at any price. The truth is that they don't understand it; it has nothing to do with "cost". When the gold reasoning becomes obvious to you, "price" won't matter. I relish the idea of swapping mere paper for an ancient value.
Rocky speaks truth here!
I remember buying at $500 as well back in those days. $500 for a gold coin, WTF?!?! I almost had "Buyer's Remorse". As I did with platinum at $900. As I did with gold at $1000.
I've got to throw an "amen" in here to Rocky and to DoChen's "amen"
AMEN . The lower prices this week are a gift. why complain when something you want is on sale?
My $.02
Great comment! I totally agree.
Wise words, there. Might only add, just to nail the bitcoin sarcophagus well shut, that I don't think the lady down the road who sells my seeds and flour never saw a computer and only uses electrical power for tv.
I get what you're saying, some things to think about:
1. Prices of everything (including the USD) are substantially distorted.
2. The spot price of gold is one of those distortions.
You bought at a distorted level, and you're considering selling at a distorted level. How do you know whether you bought too high, or are selling before a collapse? It's a black box, just like every other market. It's always been true that you can't predict the future, but this level of market manipulation makes it impossible to even have a decently good guess.
Ultimately, if you're looking for advice on this, I would have to know more about your personal situation.
These are things I would put before gold, so if you haven't taken care of these priorities first, that I would consider a valid reason to sell gold. The "old money" wealthy have country estates and frequently practice their firearms training for a reason. You have to CYA on the basics first before you can really start talking wealth storage.
No debt (proud to say never have had any in my life)
No land. Would have bought some, but circumstance has me stuck in CA for another year. I knew I'd be stuck here 3 years ago, which is why I put 20% into gold/silver rather than land that I couldn't look after. My girlfriend's family has good land, though, and they're generous/communal types who would let us use it should we need it. So we have that at least.
I've stocked ~6 months of food using long-term storage methods, but I live in an apartment, so only so much space...probably only a month's supply of water.
I have a 401k, too.
I had about 110k in cash, and knew I'd be stuck in CA for three years, so I put 20% into metals (seemed like the best option at the time). I am not stressing about finances, just upset that I bought gold to protect purchasing power, and I have actually lost it. That would be fine if interest rates went up and this was explainable, but nothing like that has happened, and there is more risk (and likely negative rates/printing in the offing). Like you said, it's a black box. That's exactly how I feel about it. My GF and I talked about that a few weeks ago; how we have no idea if we bought a bubble or a value. Fuck you, Bernanke.
I just remember these three little (mostly) words: No. Counterparty. Risk.
When you stock your pantry, do you get upset if you go to the supermarket the next week and see that foodstuffs are on sale? It's the same thing.
If you bought at 1700 and gold was at 2000 would you sell? If so then you bought for different reasons that most here and Gold might not be your best bet. If you would not sell @ 2000, why would you care if its 1500, 1700 or 2000. In fact if it drops to 1500 it mean its on sale, not that you lost money on the 1700
That's how I look at it anyhow
Devo, my husband and I are roughly similar to you. Stuck in hell hole Cali with a worthless 401k. We fortunately have 10 acres on a good well surrounded by wonderful neighbors who aren't of the modern Cali mindset. We also have a family farm in WA we can exit to. The swings in gold have,until really recently, given us ulcers. We finally wrapped our minds around the premise that the price is of no consequence. In reality we are transferring our fiat into Wealth vs income. At the end of the day, even if gold were to half, the true purchasing value will stay the same. This concept was very difficultfor us to grasp because we were indoctrinated with the idea money was wealth. You must unlearn what you have learned. Our personal goal is a minimum of 20% of our assets be in PMs. Do what is right for you but try not to be distracted by noise. Best of luck!
Miffed;-)
Devo, if you are going to be that worried about gold price, you should get out. You bought too much for your comfort level and you were hoping for a speculative gain. Most ZH readers are talking about manipulation down, but what's also happening is hedge funds are seeing the same price action you did and are concluding the bull market is over. Or at least the parabolic move up is over. The paper market moves the price 100x the physical demand.
If you can't stomach a lifetime commitment, get out and trade the technical. There will be plenty of time to accumulate physical before any dollar destruction. The UK, Japan and large EU countries have to "go Greece" first. Each of those crisis will send scared money into US dollar paper assets.
The paper market moves the price 100x the physical demand.
Is this true?
Since there is 100X more paper gold than physical gold, I'd say the ratio is pretty much spot on.
Others can supply you with links to confirm the paper multiple. I apologize for the fact that I am too tired out and frustrated posting the same information over and over here. It's not my job to educate everyone but it is the job of each of us to find out our own data and massage it. I'm happy to cheer you on but not try to convince you of anything.
Either you are serious enough to get the information to make an intelligent decision, or you are like many that I meet who want the thing handed to them on a platter. The latter type are the ones who tend to place blame on others for their own bad decisions. Not saying you are the type... not at all. We just need to find out which type we all are and move on. Self-analysis is vital.
Ive thought about it too. Mostly questioning what I think I know to be true.
Do I *really* know China/Russia are buying hand over fist?
Is there *really* a movement among eastern countries to get away from the USD for trade settlement and saving?
Do I *really* know there is a massive physical silver shortage?
Do I *really* know the western central banks are selling or leasing out gold to hold prices down?
These questions are brought on mostly by my utterly poor understanding of human nature. People just don't think in terms of principles so watching GM bondholders get screwed, watching MF Global assets seized, watching greek bonds default *and* watching the insurance not pay, watching Germany fail to get its gold back in a timely manner, watching Cyprus entertain stealing small depositor money, watching govts claim Cyprus is unique but that also laws are drafted everywhere to do the same at what happens to be the same time... None of it has any effect on any market.
So at this point its about the long game. Every time I think to sell, I have to come up with somewhere else to go. I cannot be in the above assets, and I don't have enough to buy a railroad.
Then I think of my grandparents who started out in the new country in the 50s with no assets and within 10 years had retired with a (modest) home, a (modest) car and a small savings and I think maybe if things are stable on the other side, our best chance will be in living productive lives without so many parasites on our backs and whether this gold stuff works at all will be largely irrelevant.
One thing I am sure of: If gold proves valuable, you have no choice but to join the criminal class in order to benefit from it. The elites who bankrupted the nation may still be in charge when this is over.. Your neighbors will support any law they make to "crack down on speculators". They are like battered wives who cannot admit the nature of the ones they are supporting.
Either that or we are crazy and everthing is fine.
Do I *really* know there is a massive physical silver shortage?
I never believed this one since I can go onto 100 different coin shops and buy it, and have never had a problem over the past two years as demand surged. I remember the mint sold out of coins, but that doesn't necessarily mean it was due to a silver shortage. Where is the evidence other than Sprott et al claming it so? I feel like a lot of the production numbers are put out by silver companies who have an obvious interest in claming a shortage, and then guys like Sprott eat it up and sell it to guys like me who hate banks, inflation, etc. In short: I could be a sucker.
Do I *really* know the western central banks are selling or leasing out gold to hold prices down?
This is a good question, too. I think in the lawsuit there was suspicous activity, but JPM explained they were hedging client positions. You'd think someone would be able to prove manipulation or something would leak if it's been going on for decades.
Funny thing is, except for the physical silver shortage, I think I do believe the premises I posted above. I have a bit of "fun money" (not so fun actually) in silver and if it goes to $10 I will be able to shrug it off. For me it's gold and its "money qualities" that is more of a commitment and that has an impact on my wealth (albeit still not one that will cripple me if I am wrong - but being wrong will cripple my confidence in my ability to understand what is happening in the long run).
I think you don't stand a chance in the long term unless you can become open-minded to the point that most people find you really irritating.
Another premise that a lot of people seem to have is this disconnect between paper vs physical which Ive been reading about for at least 4 years now and there is just no evidence of it at all. During the last beatdown I bought a few shares of GTU for a *minus* 2% premium. If I had bought GLD shares, I would have paid full price!
The psychology is interesting. Things like people buying only when an asset is rising, but also the rationalization and justification. I try hard to keep things real, and like you, see no evidence of a paper/physical disconnect, though I do think it can happen at some point. Something else to keep in mind: people don't want to lug around heavy coins. I told a good friend he should protect himself by buying a hundred ounces or so, and he said something along the lines of "That sounds heavy; you expect me to walk around with coins in my pockets?" He also said who cares about inflation--he can just work and make the money back (inflation is now a convenience tax? Hey maybe Bernanke can write that into CPI as a service). This is the average sentiment, I assume. The average person cares more about heft than theft.
There is no reason it should be dropping this much give the fundamentals.
Er, that's kind of the point: Fundamentals have nothing to do with these pseudo-markets. Some people imagine it is costing the Fed nothing to hold the basketball under water this long; after all, they just keystroke the credit into existence and use it to sell paper contracts. Not so. Every FRN the Mammon-Masters print adds to the burden of debt and dilutes the money base. Why do you think the arguments are getting so public and strident among the fedsters? The risks of continuously rising monetization are keeping them awake at night. "Inflation expectations" no longer remain "firmly anchored".
None of the central banks have ANY money. All they have is credit, and credit overdose is killing the system. Why do you suppose they took the risk of squeezing Cypriot depositors for a pitiful €6 billion when the recent Spanish bank bailout required €100 billion? Because savings is real money and credit is not. When debts are this massive, they must be extinguished for economies to recover. Credit cannot extinguish a debt; it just changes ownership of the liability. Somebody's gotta pay the piper, and somebody will be the workers and savers of the world.
Cyprus is every country today, and precious metals are the only safe havens, if you can just find that spot in the river.....
You said it yourself...there is no money only credit. We are seeing wholesale money destruction with every dollalr of new debt. How are PM's suppose to rise in the face of that?
you are seeing fiat destruction. Money ("gold") is not being destroyed. But, a lot of gold is falling to the bottom of random lakes due to a surge in boating accidents.
I didn't say "there is no money only credit"--I said central banks have no money, only credit. You are confusing "money destruction" with "currency debasement".
"How are PM's supposed rise in the face of that?"
Let's transport you back to Germany in 1919. You're asking, "Von Havenstein is destroying the Reichsmark with every new mark he prints. How are precious metals supposed to rise in the face of that?"
German Mark prices of Silver and Gold 1919-1923
January 1919: Silver 12 marks Gold 170 marks
Nov. 30, 1923: Silver 543,750,000,000 marks Gold 87,000,000,000,000 marks
without going in the merit of your (excellent) argument, re: "Why do you suppose they took the risk of squeezing Cypriot depositors for a pitiful €6 billion when the recent Spanish bank bailout required €100 billion?"
- Cyprus has a political component - there is also a question of size: for a pop of 1m, 10bn bail in means 10'000 per person
Very true. But the Cyprus Template has been ordained for the rest of the EU banks, and New Zealand, Canada and others have also adopted depositor haircuts for future bank resolutions. Even FDIC regs permit losses to be crammed down through the capital structure to depositors in the event of a large enough collapse.
I think large enough collapses are coming.
Don't you dare sell. You hold it for the endgame, not to watch the 'price' go up and down. Remember 1974.
Going to hold since I'm due for my anual nut exam anyway.
The gold certainly looks more appealing than the chemtrail in the distance.
Yeah, that's what I was gonna say, too... Nice chemtrail.
Better assay those bars... 80% Au, 20% Al, barium and strontium.
How do elites, their children and those doing the spraying avoid the effects of these "chemtrails"? Answer that or shut up about your chemtrails.
Yea though I walk through the valley of fiat I shall fear no evil for I hoLd physical gold and and silver and my bars and my rounds shall comfort me.
Yea though I walk through the valley of fiat I shall fear no evil for I hoLd physical gold and and silver and my bars and my rounds shall comfort me.
Yea though I walk through the valley of fiat I shall fear no evil for I hoLd physical gold and and silver and my bars and my rounds shall comfort me.
What the f--- happened there? I-pads suck.
You picked the wrong object for your comfort in the valley of the shadow of death, I would say.
If we could only multiply our gold-holdings like accidental multiple posting ...
does "rounds" mean ammunition?
a mine is a hole in the ground, with a lier standing out top.
Looks like gold is worthless now.
Oh and look, the economy is okay, everyone is still doing the Harlem Shake!
http://www.youtube.com/watch?v=ZS2Z19yTuPI
When it gets down to $5 an ounce, I am going to ask for my shovel back from MethMan and start digging --- after all, the shit is everywhere!
I miss methman, he made me laugh......at him.
Oh, is that a chemtrail I see? Hmmmm.
This going to sound sick... but when he said this: "In the bright sunlight, a few tiny specks of gold dust were still glittering on my lens and camera." the first thought that came into my mind was "LICK IT!! LICK IT ALL UP!!" But I guess they don't mind losing some gold dust.
This is always a good video to watch: Canadian comedian guy Rick Mercer visiting the Royal Canadian Mint http://www.youtube.com/watch?v=6iFiH78ltS0
13,123 feet up. Definitely want to take it easy for a day or two before you crack out the old 'sluice box'. ;-)
Hey look, it's GOLD, REAL MONEY!
I heard the Chinese are buying 50,000oz a month directly from mines.....cash - US dollars. Smart cookies.
I've heard entities are definitely buying via multiple channels to mask themselves...
Someone told me an unspecified government entity approached their firm to find sources of pretty much dore bars (the 80% pure direct from mine) at discount...
Not to mention companies apparently buying directly from miners to ensure supply of silver. (I think ZH mentioned this, or a bullion bug site)
Plus you gotta wonder all those gold buying stores... who are they selling to after melting them down?
Thank you - this is just one more reason why bitcoin will be worth both jack and shit in the long run, and gold will ALWAYS (as in forever) be valuable.
The author is correct. instead of spending $150 trying to mine bitcoins, everyone should go start their own $100 million mining operation.
PS: if he is advocating buying the mining stocks, how is that any better than mining bitcoins?
The only real way is to actually be using your own labor to get the gold. And guess what? There's a pretty finite limit on how many people can do that.
Right. I get you. Why labor to mine gold or to earn enough fiat to buy some from someone who mined it? It's better to kick back and let the machine create wealth. Labor is fucking worthless. For that matter, humans are pretty fucking worthless altogether, right? Please. If this is 'the new paradigm' we've all been waiting for, you can count me out.
On the contrary, I'm saying labor is worth it. Paying other people to mine it, or buying pieces of paper as fractional ownership in the company that mines it, is not the same as doing it.
How is a guy sitting on his ass while a multimillion dollar machine extracts the ore, and another guy sitting on his ass driving a massive truck, to get the ore to another guy that sits there while a machine grinds up the rocks, labor? The machines are doing all the real work. Soon enough, the trucks will drive themselves, that is how little human labor is involved in industrial mining.
Will the true "value" of gold be zero once it is completely mined by robots?
How is buying gold with fiat different than buying bitcoins with fiat?
Took a lot of labor to make that truck.
.
Did it? At what percentage of human labor to machine labor does it still count as human labor? 10%? 1%? 0.1%?
It took a lot of human labor, proportionally, for people to design and manufacture the GPU, FPGA or ASIC to mine bitcoins, too.
Bought 2 maple leafs today. Couldn't resist the fire sale. Guess its time to go boating.
Miffed;-)
Happy Sailing!
"And I think we could very well first rise, and then have a crash, eh, from the summer onward." - Marc Faber 3-2-13
http://xrepublic.tv/node/2792
May be why we see the ramping up of the distractionary war drums, and threats to cause fear. People that are fearful are easy to manipulate.
Why can't they arrest these warmongers and start the whole picture show over?
http://www.forbes.com/sites/jeffmcmahon/2011/03/28/epa-expect-more-radia...
Turn on the machine and lets all spin in some more cycles.
Crash of 1907 ... WW1
Crash of 1929 ... WW2
Crash of 2008 ... WW3
Same old same old same old shiztenoozen.
Can humanity get off the train before these babylonians blow it all to kingdom come?
Forward!
How about we just buy physical?
Aye aye Cap'n
Well, just back from an auction, believe me, the price of "GOLD", is not, I repeat, not getting cheaper!...(10) "Edward Vll british 8 gram 1909-M sovereigns", fetched $5000.
people are getting wise to the real money
That's pretty cool.
But would you count a 1909 Sovereign more of a numastsic collectible "art" investment item and hence not truly indicative of normal investment grade coins?
Numismatics ARE investments.
If gold goes to $50,000 an ounce then on hindsight, it would have been better to buy a larger number of coins of no numismatic value.
Gold is a commodity. 1909-M sovereigns are not. Stop comparing apples to oranguatans.
Tien Shan means, 'Heavenly Mountain' in Mandarin.
"The four shiny bars..."
Interesting that they have to grind the bars. It means, they are not very pure. Understandingly they do not have to be above 99.5% for good delivery, but when you melt and pour gold with 0.5% impurities it comes out very crappy looking.
Read much?
"Minutes later, four bars containing around 80 percent pure gold and worth $2.6 million were ready for polishing."
My bad, I forgot it was a mining melt not refiners :)
Newly poured bars are always buffed. The impurities are on the surface of the bar.
Mine Doré Bars Most major mines process their gold-bearing ore at the site of the mine, producing low purity “doré” gold bars. The cast bars have variable weights, sometimes weighing as much as 25 kg, and have few or no markings. They are normally sent to gold refineries for further refining into bars of high purity (99.5% or more).They are dore gold, not investment gold.
cut to the chase, cut out the middleman.
tungsten, bitchez.
Frankincense, myrth, and GOLD.
GOLDEN parachute.
GOLDEN goose.
GOLDEN egg.
the GOLDEN years.
GOLDEN opportunity.
Don't see much about fucking "FIAT" in there, do ya? THEY are shakin' the GOLD and SILVER TREE, again. Don't be intimidated, fooled, or abused by this bullshit. Every oz. that departs your hands will eventually wind up in the CB's coffers. IF IT'S SUCH A FUCKING BARBARIC RELIC, THEN WHY DO ALL THE BIG BANKS, AND COUNTRIES WANT ALL OF IT? Just practice patience, lock it up and don't King Mizer the hell out of it. Buy the Dips in stages, just like you bought it going up. "On a long enough timeline, the survival rate for everything drops to Zero, EXCEPT GOLD :)
If I take a step back and look again, I see equal "value" and equal absurdity in both the bitcoin machine and all those big trucks and those no-sissyboy excavators.
Monetary systems are based on faith and nothing more than faith. Add some discipline to whatever is behind the faith, and any system might work for a while. Just because it might take lots of work, lots of big trucks, and lots of environmental devastation doesn't seem to add credence to one particular faith.
Perhaps I was born on the wrong planet or to the wrong species, but this worship of shiny metals seems, well, silly. Given the current moves in the PM markets (I know, I know...it's MANIPULATION!), and the oft-touted claim that billions of dead people swore by it, I think what those Kyrgyzstan miners should do is hire George Romero and start digging up the dead and getting the zombies (aka in PC talk/Shaun of the Dead: mobile deceased) to put a bid under the PM market.
You felt the same way when gold was at $500/toz I'm sure. You'll feel the same at any price. There are many ways to preserve capital, gold is only one of them. And, just like any other asset, its price will vary according to the currency that is used to acquire it. I appreciate your approach to the issue, but choose to buy gold as my vehicle of choice. I wonder what the folks in Cyprus wish they had done....
Folks in Cyprus? Perhaps wish they had been born in the north of the island and spoke Turkish? Just a guess.
Like everyone else on Zerohedge, I bought gold in 1999-2000. Really. As an asset play. As a trade. Lots of folks in my industry did the same. They held a long time, but tend to sell into strength, and especially into froth. Many were the "big money" that drove it up and brought it to the attention of retail, yet when they sell now (or hire a major bank to hedge for them) it's called MANIPULATION!.
Like I always say, I refuse to belong to any faith that would accept me as a believer, but I'll genuflect to be polite with anybody. What baffles me, and then again doesn't baffle me because I have seen it so many times in so many markets, is the way people will embrace the faith and take each and every opportunity to demonstrate their undying belief by reciting all the prayers and incantations the faith teaches them. In every market at every time in history, the faithful repeat the same memes and chants and counterattacks against those who would blaspheme what the believers "know" to be true. "Money on the sidelines" "They're not making any more of it" "'They' are scheming against 'us'". Scroll through any ZH PM article. Visit any of the hundreds of PM sites the Web-Ad market can now support. One is hard pressed to find any difference between the affirmations of faith expressed there with what one hears at Friday mosque or a Southern Baptist revival meeting.
Everybody is somebody else' sheeple. Good to remember that. PMs may well go to the moon, and the 180 currently used forms of fiat might die in our lifetime. Then again, they might not. Yes, fiat is a crazy thing, but if one can be objective for a moment, so is basing a monetary system---and thus economic prosperity---on blocks of elements. While I don't know what a real alternative is, I cannot accept that there is one, and only one correct answer. Don't marry the trade.
Thank you for the perspective, it is well reasoned and cogent. I am buying PM's for the simple reason that I believe the political class in this country is either purposely allowing the depletion of our wealth or is so stupid as to believe that we can retain the global reserve currency status by printing 1 trillion a year and spending even more. And this exacerbated by the demographic hill that lies ahead. We have sold China all our rare earths, our copper, our lead, our zinc, and probably a large portion of our silver and gold ... traded for King Consumption. They continue to corner the world's supply of all these minerals as well as an increasing share of energy. Our leaders are actively pursuing the Green Course, whereby, we reduce our capacity to acquire energy while China truly pursued 'all of the above' ... It is not a matter of blind faith that, We are Screwed.
We have been living on debt my whole life and theoretically this will have to be paid, defaulted upon, or be eradicated by currency inflation. I see no real desire to repay the debt, default has so many unintended consequences that the body politic will not tread along that path; thus, we continue to inflate. I do not see my purchase of Pm's as a market trade as much as a trade of assets. I trade one that I know will deflate for one that perhaps will not.
I suppose I could turn around Rocky's question and ask him if he thought the S&P, after climbing from 666 to 1000 a few years ago, could climb to 1550. Gravity is an absolute. Markets are not absolutes, and have no pure Newtonian equation to quantify them. Markets do not behave the same 100% of the time, so we best question what is repeatable fact and what is assumption, and react accordingly, and not to what we want, but what we see happening.
"Logic" is just the world we create based on our false assumptions.
Thanks for the perspective on the matter. I see the relationship between the S&P and the PMs to be about the same. It's not the "price" nor "value" that matter much to me. Inflation adjusted charts pretty much tell that story. I used to trade stocks on a casual basis but found out that if big money was to be made I had to make a semi-career out of it to do it right. At the time, trying to run a business and other enterprises, I just couldn't devote time to the endeavor. Gold at $400 or $1,400 is the same thing since the ounce is still an ounce. The S&P at 666 or 1550 is the same to me since the value of the dollar has changed in tandem with the "price" of the index. More or less... give or take. PMs are a no-brainer and require no maintenance other than finding a safe place to put it. It'd rather take my chances on burglars than the Wall Street variance of thieves. At least I can wreak vengeance on the local type. There is some solace in that.
See? No real difference in the long haul. The best money-making engine in the world is one's own business. I've had several and have never taken a paycheck that didn't have my own signature at the bottom. "Investing" for a living is not really making a living. It's paper shuffling hoping to pick up the proverbial pennies in front of the steamroller. Having a brokerage account (digits in a larger server) are no better than BTC in my view. It's ephemeral wealth.
You know what the real truth is? I only use disposable income to buy PMs. It's not money I need to buy food or shelter. If I lose every cent of it, I have only myself to blame. Whereas, those who "play" markets are just gambling -- the house always gets its cut. Those who "bet" on Wall Street and its many variants are those who need to be able to blame someone/thing else when the shit hits the fan. The entrepreneurial spirit is lacking. Just my view.
No doubt I've stepped on some toes here. If so, take it as a signal for introspection rather than retribution.
The problem with money is that no matter the question, the answer is always "more". It's a superficial answer, an easy and expedient one but for exactly that reason it's the one always put forward.
The difference between gold and all the others is it very drastically limits "more", so you have to look to the real answers to those difficult questions rather than simply throwing money at whatever problem you're looking at. You can make almost any inefficient, broken, fundamentally stupid system just about work if you throw enough time, energy and money at it.
The problem with that is, money is peoples lives; throwing money at problems is literally taking other people's life and throwing it away. At the very least it's direspectful, but really it's theft of all that part of their life which they have to slave to pay conventional or inflation taxation.
What gold (and bitcoin) gives me is the assurance that your ability to take my life without my permission is very limited. You're going to have to come after me physically with weapons, and then I get a chance to make you pay.
Why would anyone spend the fuel to hunt you down when they could fry your storage and connection?
snif, snif....is that capitalism I smell? Fucken yeah it is...way to go Butterly labs coming up with retail bitcoin miners. They look nice, have a variety of speed options. What's not to like. Sure I bash bitcoins but even I can appreciate the fact that somone invested capital to produce a product for an emerging market.
No wonder the price of gold is not going up. They are making more of it all the time.
Only 21,000,000 BitCoins.
bitcoin is a great idea that will unfortunately fall under the control of the syndicate sooner or later, like everything else
Still a boatload of gold to be had in North Wales I know exactly where but the idiot environmentalists stopped them them digging it out. Who cares about acid water from the mine that could melt your flesh off.
When will you ZeroHedge goldbugs learn? Gold is on its way down, way way down. Its clearly in a bubble. Stocks is the place to be in now.
I don't even know how to begin this, but if you think that stocks are tangible, safe, unmanipulated, and will turn a profit, then by all means, give me five picks.
Cocteau Twins "In the Gold Dust Rush"
http://www.youtube.com/watch?v=_7igZdDJyz4
Yea and how low does the price go before that whole operation shuts down?
Quit your whining devo. We've all lost in life. If you think your dollars will save you, stuff them in a mattress and shut up.
They forgot to talk about how tungsten is now a part of the finishing process.
Foreign mines are a lot riskier than in your own country or close by. In the event that Gold takes off, really takes off, your asset is a gillion miles away where anybody can roll up in a dozen jeeps with AK47s and take it way. Alternatively the local government can bleed you with taxes or nationalize. Not that your own government wouldnt tax the hell out of it but they are probably going to do better.
"thanks for the Gold, Stupid!"
Looks like a good place for a few heavily armed men to visit.
The propaganda machine is running full throttle
take the bars and run!
Wait a minute ....
Tyler stop trolling with that ButtFuckingLiars vaporminer and put pics of the Avalon up there!!
My son's mother makes $5 a week mining platinum in South Africa from the comfort of her own home. For information on how your son's mother can make the same, or even more money, please drop a letter to:
SILVER MANIPULATION DEPT.
ROTHSCHILD MERCHANT BANK.
CITY OF LONDON.
Listen to some of you guys. If you didn't think that ti could fall at the time you bought then shit, you weren't thinking clearly apparently! I knew buying that it could go lower, so I buy in segments.
All you fearful pussies need to listen up- let them balls drop and quit bitching about silver/gold falling. We are gold bugs. That shit should not fly.
SECOND, this is may be an OPPORTUNITY.
THIRD, if you're that scared of it falling lower- go to the coin shop and sell it- all of it- you don't deserve to hold the yellow/white metal in that case.
LASTLY, all this fearful talk makes me WANT TO BUY MORE. Yes, blood in the streets gets me horny if you will. It should for you too if you know how to trade.
I'll be at the coin shop Saturday buying back the 35 OZ's I sold at $34.
Quit being a bunch of undecisive, scardey cat pansies... really. Stop. Your emotion is holding your go-nads. And to think some of you guys actually trade.. holy shit.. I wonder how intersting THAT is for you...
KNow what you want, do it. I grab with market by the nuts and twist every day. YOU own your fate, YOU own your wealth. MAYBE TPTB WANT you to be scared right now.
Alright... good day.