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Did "They" Ever Tell You To 'Buy Gold' Or 'Sell Stocks'?

Tyler Durden's picture




 

Gold bears are coming out of the woodwork to declare gold dead. Santiago Capital's Brent Johnson wonders where they have been for the last 12 years and reflects on the reality of why one should hold the precious metal; putting the recent weakness in its proper context.

Some context?

 

 

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Fri, 05/10/2013 - 19:55 | 3550232 LetThemEatRand
LetThemEatRand's picture

The Gold is dead.  Long live Gold!

Fri, 05/10/2013 - 19:58 | 3550237 FEDbuster
FEDbuster's picture

Paper gold is dead, long live physical.

Fri, 05/10/2013 - 20:01 | 3550240 LetThemEatRand
LetThemEatRand's picture

L'or papier est mort, vive l'or physique!

Fri, 05/10/2013 - 20:14 | 3550272 kliguy38
kliguy38's picture

We're entering the end game ZH'rs    the rubber is going to meet the road when this leveraged paper short collides with the physical accumulation of the East......this will not end pretty......Epic!

Fri, 05/10/2013 - 20:23 | 3550279 LetThemEatRand
LetThemEatRand's picture

Ben:  Monsieur, have some more paper gold.  It's wafer thin.

Economy:  I couldn't eat another fucking thing.

Ben:  Garcon!  Get monsieur a bucket.

Fri, 05/10/2013 - 20:23 | 3550291 bullionbaron
bullionbaron's picture

"Rumors Of My Death Have Been Greatly Exaggerated" - Paper Gold http://www.bullionbaron.com/2013/05/rumors-of-my-death-have-been-greatly...

Fri, 05/10/2013 - 20:40 | 3550333 Never One Roach
Never One Roach's picture

When the University of Texas Retirement Fund sells its $4 Billion of gold bars, I'll consider selling mine. Same....when Northwestern Mutual Ins Co. sells its massive holdings...same with the Central Banks...when they start sell instead of grabbing all the gold they can get...then one needs to pause maybe.....

 

But for right now, I agree with the Chinese and Indians....all 3 billion of them.

Fri, 05/10/2013 - 23:44 | 3550743 FEDbuster
FEDbuster's picture

Agreed, I will join with "Mrs. Wang" and continue to trade FRNs (or Yuan) for shinny troy ounces.  The "Mrs. Wangs" bought over 225 tons of physical, barbarous relic in March.  Not sure of how much the "Mrs. Patels" bought, but I bet it was measured in tons, too.

Sat, 05/11/2013 - 02:50 | 3550888 Taku
Taku's picture

I believe China consumed about 800 metric tons in 2012.

It's about 320 metric tons for 2013. In first three months.

China, last I heard, buys less than India.

Sat, 05/11/2013 - 08:26 | 3551068 GetZeeGold
GetZeeGold's picture

 

 

More debased fiat for me........I'M SOOOO BLOODY RICH!!!!

 


Did "They" Ever Tell You To 'Buy Gold' Or 'Sell Stocks'

Hmm.....not that I can think of.

Sat, 05/11/2013 - 08:35 | 3551142 FEDbuster
FEDbuster's picture

I am still a Zimbabwe multi-trillionaire, bitchez.

Sat, 05/11/2013 - 09:42 | 3551204 Pegasus Muse
Pegasus Muse's picture

"We're entering the end game ZH'rs ..."

Here's a new Andrew Maguire interview.  Talks at length about the divergence between paper and physical. 

Says Western CBs lost another 40 tons of physical gold yesterday alone.  All that pretty shiny yellow metal is heading east. 

 http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2013/5/11_Andrew_Maguire_files/Andrew%20Maguire%205%3A11%3A2013.mp3 

Sat, 05/11/2013 - 11:29 | 3551351 Pool Shark
Pool Shark's picture

 

 

You too can be a Zimbabwe trillionaire, and all it will cost you is 1/8th of a Silver Eagle:

http://www.providentmetals.com/coins/currency/inflationary-currency.html

 

 

Sat, 05/11/2013 - 13:46 | 3551646 FEDbuster
FEDbuster's picture

Maybe we will see one ASE = US$1 trillion?  If the Bernak hits the meth pipe a few too many times while hitting his zero key.

Sat, 05/11/2013 - 13:57 | 3551678 GMadScientist
GMadScientist's picture

http://www.youtube.com/watch?v=Ni-WNpEfsjs


Line 'em up now to greet the sacred cow.

Sat, 05/11/2013 - 16:05 | 3551969 BoNeSxxx
BoNeSxxx's picture

Wait, was this filed under "Friday Humor"?

Sat, 05/11/2013 - 14:53 | 3551823 Mesquite
Mesquite's picture

@ Pegasus...

Thank you...

Sat, 05/11/2013 - 13:16 | 3551584 Mad Max
Mad Max's picture

I've been a zim$ Trillionaire for years now, all for the same cost, at the time I became a Trillionaire, as a pre-64 US quarter.

Sat, 05/11/2013 - 11:01 | 3551299 Rustysilver
Rustysilver's picture

Taku,

Have Indians always been buying gold for their daughters and jewelry.  It probably me but I don't remember reading how Indians been snapping up all the gold that they can find.

Sat, 05/11/2013 - 12:56 | 3551536 Pinto Currency
Pinto Currency's picture

 

Check out these physical premia in India.

Mumbai spot physical premium on gold is currently $110 per oz.


http://zeenews.india.com/business/bullion/index.html

http://www.moneycontrol.com/commodity/gold-price-in-mumbai.html

Sat, 05/11/2013 - 13:05 | 3551552 markettime
markettime's picture

Not only has gold been a tradition in India, but Indians in general are tired of the government trashing thier currency. Every time I go back to India I am shocked at how much prices have increased. Gold is their way of coping with the inflation as well as meeting tradition from what I understand. 

Sat, 05/11/2013 - 16:46 | 3552051 AldousHuxley
AldousHuxley's picture

too much gold around your neck and you have risk of this on your way to work:

 

http://www.youtube.com/watch?v=UHIWFkQ_2KQ

 

watch till the end

 

and leave the gold in a safe at home.

Sat, 05/11/2013 - 02:51 | 3550889 Taku
Taku's picture

double post

Sat, 05/11/2013 - 12:56 | 3551537 markettime
markettime's picture

That is funny...every nml guy I ever talk to trashes gold and pushes whole life instead. 

Sat, 05/11/2013 - 14:01 | 3551685 Doña K
Sat, 05/11/2013 - 15:34 | 3551920 debtor of last ...
debtor of last resort's picture

Sprott sold a large part of his holdings in pslv and bought mine stocks, now this. GLD etf rose this week... TBTF is contacting certain institutions to sell physical and buy paper to cover shortages? University of Texas receives a new invented subsidy in dollars for the coming years, or just the gun on the forehead?

Sumtin fishy here... thanks for your post, it's saved.

Sat, 05/11/2013 - 16:13 | 3551984 NoClueSneaker
NoClueSneaker's picture

Yo long Kyle Bass, methinks. Good move. He stilll gagged ...

He is in Asia, and definately on a BIG project ....

Fri, 05/10/2013 - 21:09 | 3550409 DoChenRollingBearing
DoChenRollingBearing's picture

bullionbaron

 

Nonetheless, many of us will continue to accumulate and hold our physical gold.

bb, do you have any news re the magazine American Hard Assets?  Rumor is that it is folding, which would be a real shame.  Thanks for any information!

Fri, 05/10/2013 - 21:14 | 3550424 bullionbaron
bullionbaron's picture

There's definitely reasons to hold physical, just get tired of the lack of facts used in scaremongering.

American Hard Assets is from same editor as Australian version. I haven't seen a new copy on the shelf in around 6 months and supposed to be 6 copies published a year. Doesn't look good, I don't know anymore. Haven't been able to contact the editor.

Fri, 05/10/2013 - 21:17 | 3550435 DoChenRollingBearing
DoChenRollingBearing's picture

Ah, too bad.  I gave them a nice write-up at my blog about three months ago.  They then comped me for a subscription (one free issue it looks like).  It was an interesting idea, but maybe Oz and the USA just are not ready yet.

Fri, 05/10/2013 - 21:57 | 3550546 isudas
isudas's picture

You might try here.

http://www.ahametals.com/

or their recent edition is here

http://americanhardassets.epubxp.com/t/34658

Thanks for the lead

Fri, 05/10/2013 - 23:07 | 3550686 augustusgloop
augustusgloop's picture

i'm waiting for American Hard Assets #25: chocolate thunder

Sat, 05/11/2013 - 19:00 | 3552236 Jam Akin
Jam Akin's picture

When it comes don't get stuck in the pipe...with those liquid assets

Sun, 05/12/2013 - 10:01 | 3553377 samcontrol
samcontrol's picture

The paper gold market lives on.

Sat, 05/11/2013 - 13:17 | 3551564 Xue
Xue's picture

Zhi huangjin yi si, shiti huangjin wan sui!

(''Paper gold is dead, long live physical gold'' in Mandarin)

Fri, 05/10/2013 - 20:15 | 3550274 Aeternus
Aeternus's picture

I'm not sure why the fiat tards have to keep rehashing this argument over and over again. It's pretty simple, has our debt based monetary system changed? No.

 

Closing price of gold 1792 - $19.39

Closing price of gold 2012 - $1,664

 

Yea, I don't see any kind of long term trend developing here, it's a mystery.

 

On a long enough timeline the survival rate for every fiat currency drops to zero.

 

http://www.youtube.com/watch?v=deuC8GPr31A

 

 

Fri, 05/10/2013 - 20:35 | 3550319 WhiteNight123129
WhiteNight123129's picture

Your data is too short my friend.

In 1266 one French ~livre~ corresponded really to its weight of 409 grams of Silver. In 1790, it was so debased that it was 1/18th of its weight of 1266. I think we have an acceleration from 1792 onwards....

Sat, 05/11/2013 - 15:02 | 3551845 css1971
css1971's picture

The Great British Pound used to be one Troy pound (373g) of Sterling silver.

Today the Great British Pound is 9.5 grams of brass.

 

And they say they worry about counterfeiting...

Sat, 05/11/2013 - 22:12 | 3552687 Lord Koos
Lord Koos's picture

I'm not planning to live for 800 years, so gold's intermediate to short term prospects are of more interest.

Sat, 05/11/2013 - 10:56 | 3551202 Kirk2NCC1701
Kirk2NCC1701's picture

1792?  Really?  Another nice but totally meaningless factoid.  Assuming the truth and ALL facts matter, and not just the ones we like (because they support our agenda and ideology/worldview), then...

The only things that matter if you are buying it as part of a portfolio, are:

  1. When you are buying (I got money to invest today or this month, not 220 fucking years ago)?

  2. How long will it stay in Allocation (before I start cashing out or re-balancing)?

  3. What Volatility can I handle (psychologically, or financially if I need to cash out or choose to re-balance into more promising asset)?

  4. Asset Allocation: What fraction of my portfolio should contain PM?  10%, 15%, 20%, 25? 35%?  How much in hard bullion, and how much in paper?  Keeping in mind that the paper portion is used purely for speculation (with lower margin costs than bullion) when buying & selling.  You do NOT want to have the dealers eating your bullion profits with their margins, so avoid 'churn' with buying & selling bullion.

  5. Exit Strategy: When and how do I intend to cash out?  When I retire or die?  When TSHTF and money is re-anchored to gold/PM?  When all else has tanked and I need some money?  When?

All else is BS and noise, stated out of ignorance, or said deliberately to support a hidden agenda. 

But, since most ppl are not that smart and get distracted by almost anything (like my 3 mo. old puppy), the BS usually works (has high stick ratio), sad to say.  Well, somebody has got to 'serve' (make money off) the bottom half of the IQ Bell-curve!  There's an army of 'entrepreneurs' and predators (all very smooth & charming SOBs) looking to make money off the poor, uneducated, uninformed, gullible people, alas.  Happily, most of these work in the usual and popular establishment.  There's a reason that snake-oil salesmen and TV evangelists are so numerous in the US:  It works, it's a very profitable business!  Sad, but true. 

A good Adviser is very difficult but great to find.  Make sure he/she discloses up front how they make money and if or how they have 'skin in the game'.  My view is:  No skin in game?  No game!  If you choose to DIY, then you must do DYOH, and manage it actively as intended, and cannot get lazy or deviate from principles you set up at the beginning.  Otherwise you become... 'Unprincipled'.

I've followed Brent's AV postings for a year now, and must say I'm impressed with his profound understanding of Currency and it's (mis)creation, and Money (PM).  It was in fact an email link I got from a friend, who got me to follow Brent and thus ZH.  Interestingly enough, ZH has made me smarter, but no richer: Having increased my PM holdings significantly, has seen its cash value drop, and having canibalized the Equities in the process, has compounded the problem.  Sometimes "a person can be too smart for their own good" applies here.  And extreme positions (financial or personal) are filled with risk and dangerous people.  That much is or should be obvious.

Yes, some buy gold to hold the bullion "forever", but that is a different conversation and not part of this article. If one were to stay on topic.

Sat, 05/11/2013 - 10:57 | 3551286 Occasional
Occasional's picture

Kirk,
No need tonget grumpy here....
You don't plan on liv'in 200+ years?
Haven't you heard?
We've got us Obamacare!
Da gubment is gonna take care of all us!
I can't believe you're not dialed in.

......... You must not have your OBphone......

Ok, sarc 'off'

Sun, 05/12/2013 - 10:04 | 3553383 samcontrol
samcontrol's picture

most people here don,t have portfolios.

+1 capt kirk.

Sat, 05/11/2013 - 17:37 | 3552130 W T F II
W T F II's picture

And, in 1792, THIS happened:

http://en.wikipedia.org/wiki/Panic_of_1792

Sound familiar..?

Sat, 05/11/2013 - 18:07 | 3552173 machineh
machineh's picture

Closing price of gold 1792 - $19.39

Closing price of gold 2012 - $1,664

Dude ... have you worked out your rate of return?

(1664.00/19.39)^(1/220)-1 = 2.04% p.a.

BIG GOLD, SMALL DICK .... errr, BANK ACCOUNT.

 

Fri, 05/10/2013 - 20:24 | 3550295 Jim in MN
Jim in MN's picture

OT But Holy Shit

http://news.yahoo.com/unexpected-twists-case-deadly-blast-texas-fertilizer-plant-194420106.html

Texas authorities arrested Bryce Reed, a paramedic with West Emergency Medical Services, at 2 a.m. Friday and have since charged him with possession of a pipe bomb. Mr. Reed was among those who responded first to the fertilizer plant explosion and served for a time as incident commander at the site. He was also shown giving a taped eulogy for explosion victim Cyrus Reed at an April 25 memorial in Waco, Texas, attended by President Obama.

Police have neither confirmed nor denied that Reed's arrest is tied to the plant explosion. However, authorities said Friday that the Texas Rangers and the McLennan County Sheriff’s Department have launched a new criminal probe into the incident, with Texas Department of Public Safety chief Stephen McCraw pledging that the state will “leave no stone unturned.”

Fri, 05/10/2013 - 20:48 | 3550354 Element
Element's picture

It seems to be saying he turned up after the explosion?

Fri, 05/10/2013 - 21:30 | 3550471 RaceToTheBottom
RaceToTheBottom's picture

That would be terrible if he was just Jinning up some OT.....

Sat, 05/11/2013 - 13:23 | 3551597 IrritableBowels
IrritableBowels's picture

Scapegoat.

Sat, 05/11/2013 - 17:39 | 3552134 W T F II
W T F II's picture

This s#!t happens all the time. Volunteer fireman start blazes they then rush to the scene to help put out.

A wacked-out "rescuer's syndrome", or something..??

Fri, 05/10/2013 - 21:06 | 3550395 azzhatter
azzhatter's picture

hmmm. I bought 8 more gold eagles today

Sat, 05/11/2013 - 06:48 | 3551041 de3de8
de3de8's picture

That's some serious coin.

Sat, 05/11/2013 - 08:35 | 3551140 Svendblaaskaeg
Svendblaaskaeg's picture

Not dead - just pining for the Fjords

Fri, 05/10/2013 - 20:03 | 3550242 WhiteNight123129
WhiteNight123129's picture

The emerging world stagflationary expansion is not over. This is due not to a continuation of the export binge or infrastructure bing from China but due to large adn fast technology transfer. So industrial commodities in trouble but water problems are real.

Fri, 05/10/2013 - 20:02 | 3550245 nmewn
nmewn's picture

Pardon the thread jack...but this is kinda important...

"The immigration reform measure the Senate began debating yesterday would create a national biometric database of virtually every adult in the U.S., in what privacy groups fear could be the first step to a ubiquitous national identification system.

Buried in the more than 800 pages of the bipartisan legislation (.pdf) is language mandating the creation of the innocuously-named “photo tool,” a massive federal database administered by the Department of Homeland Security and containing names, ages, Social Security numbers and photographs of everyone in the country with a driver’s license or other state-issued photo ID.

Employers would be obliged to look up every new hire in the database to verify that they match their photo.

This piece of the Border Security, Economic Opportunity, and Immigration Modernization Act is aimed at curbing employment of undocumented immigrants. But privacy advocates fear the inevitable mission creep, ending with the proof of self being required at polling places, to rent a house, buy a gun, open a bank account, acquire credit, board a plane or even attend a sporting event or log on the internet. Think of it as a government version of Foursquare, with Big Brother cataloging every check-in."

http://www.wired.com/threatlevel/2013/05/immigration-reform-dossiers/

Fri, 05/10/2013 - 20:04 | 3550251 LetThemEatRand
LetThemEatRand's picture

Tracebook.

Fri, 05/10/2013 - 20:06 | 3550258 nmewn
nmewn's picture

Only mandatory.

Fri, 05/10/2013 - 20:12 | 3550267 LetThemEatRand
LetThemEatRand's picture

A lot of people seem to think Facebook is mandatory.

P.S.  for once I'm not your downvote.

Fri, 05/10/2013 - 20:28 | 3550308 nmewn
nmewn's picture

"Socially captured"...lol...kinda like us I guess, just on another level.

And you'd be surprised how many times I up vote you or just give it a pass...I've got a confirmed troll/enemy and I do go out of my way to make more sometimes ;-)

Fri, 05/10/2013 - 20:45 | 3550344 LetThemEatRand
LetThemEatRand's picture

I reluctantly admit that I've upvoted you a few times but only when I'm sober.

Fri, 05/10/2013 - 20:56 | 3550375 nmewn
nmewn's picture

lol...I'm only sober when its required of me...and even then, most people aren't quite sure.

I think most of them are on prescribed meds so it kinda equals out ;-)

Fri, 05/10/2013 - 21:03 | 3550386 DoChenRollingBearing
DoChenRollingBearing's picture

Lezze here...  Yep, two more for FEMA Camp!  Ah, you don't need to give your addresses, we already know where you live.  

Fri, 05/10/2013 - 21:23 | 3550450 LetThemEatRand
LetThemEatRand's picture

In FEMA camp, there is a whole new meaning for "meatballs."

Fri, 05/10/2013 - 22:07 | 3550578 DoChenRollingBearing
DoChenRollingBearing's picture

I'd have given you two greens, one for "meatballs" and one for the cowardly pussy junking us...  Probably a DHS Brownshirt Trainee...

Fri, 05/10/2013 - 22:17 | 3550601 LetThemEatRand
LetThemEatRand's picture

I think they now wear black shirts, tan pants and tan military boots with bloody skull insignia.  See 'ya in camp!

Fri, 05/10/2013 - 22:32 | 3550626 Braverdave
Braverdave's picture

I love camping!

Do we get to go hunting and fishing?

Fri, 05/10/2013 - 22:40 | 3550643 LetThemEatRand
LetThemEatRand's picture

Hunting for a moment of sunlight and fishing for justice.  

Sat, 05/11/2013 - 07:29 | 3551071 GetZeeGold
GetZeeGold's picture

 

 

 

Life will be great after we win the lotto and get to go to the island.

Sat, 05/11/2013 - 10:19 | 3551245 francis_sawyer
francis_sawyer's picture

Pursuant to recent policy change... Biometric Identification system will be implemented for posting comments in ZH forums coming in 5...4...3...2...

Sat, 05/11/2013 - 19:15 | 3552262 Jendrzejczyk
Jendrzejczyk's picture

The gagball in your mouth makes it hard to understand you.

Fri, 05/10/2013 - 22:12 | 3550589 Braverdave
Braverdave's picture

My compliments on all the hugging and kissing :)

It is always nice to see people disagree yet still maintain a certain level of civility.

Goes to show there still might be hope for us all.

I take part in a few forums of a religious nature and my motto there is that "I promise not to excommunicate you and/or kill you.". Always said with a smile and/or wink!

I am drunk lots too :)

 

Fri, 05/10/2013 - 23:21 | 3550712 LetThemEatRand
LetThemEatRand's picture

I only drink when I'm overly sober.

Sat, 05/11/2013 - 16:34 | 3552024 tenpanhandle
tenpanhandle's picture

What we have here is a failure to excommunicate.

Sat, 05/11/2013 - 19:11 | 3552258 Jendrzejczyk
Jendrzejczyk's picture

What is this "sober" state you speak of?

Fri, 05/10/2013 - 20:25 | 3550297 Miss Expectations
Miss Expectations's picture

They are doing this already with all school children via Common Core:

RALEIGH — A national database created to collect and track confidential personal information from public school students from kindergarten through high school is drawing fire from parents and privacy experts.

The Shared Learning Infrastructure, built over the past 18 months, stores millions of student records identified by name, address, race/ethnicity, economic status, guardian, primary language, grade, test scores, attendance, disciplinary history, standards and skills mastered, student hobbies, learning disabilities, homework completion, school and non-school activities, and much more. Even Social Security numbers sometimes are collected and stored.

This $100 million data warehousing project, funded by the Bill and Melinda Gates Foundation, the Carnegie Corporation of New York, and Amplify Education, was initiated by the Council of Chief State School Officers, and the National Governors Association as a key part of the federal Common Core State Standards. After the infrastructure was completed, inBloom Inc., a nonprofit, was created to run the system.

http://www.carolinajournal.com/exclusives/display_exclusive.html?id=1001...

Who can keep up with these fuckers?

Fri, 05/10/2013 - 20:33 | 3550314 nmewn
nmewn's picture

I heard about that...the usual suspects, oligarchs, elitists, allied with government.

I've got a serious problem with public-private "partnerships" in case no one has noticed ;-)

Sat, 05/11/2013 - 11:37 | 3551371 Pool Shark
Pool Shark's picture

 

 

But of course, you still won't need any form of ID to vote...

 

 

Sat, 05/11/2013 - 15:26 | 3551903 css1971
css1971's picture

Who cares who wins the vote?

Sat, 05/11/2013 - 16:37 | 3552031 tenpanhandle
tenpanhandle's picture

There's more to the vote than picking figureheads.  Ballot initiatives on property taxes, increased spending, social issues etc. do have some import, IMHO.

Sat, 05/11/2013 - 23:17 | 3552868 espirit
espirit's picture

Just another downside to a national/international database is confidential information can be "leaked", especially for those misguided folks that don't adhere to the rules or color outside of the lines.

Be afraid, very afraid.

Your data are belong to us.

Edit: As an aside, your DNA was patented and we are considering exiling it to an unamed location.

Fri, 05/10/2013 - 20:46 | 3550347 Dugald
Dugald's picture

Just another brick in the wall........

Sat, 05/11/2013 - 06:49 | 3551044 de3de8
de3de8's picture

Everyone except illegals.

Sat, 05/11/2013 - 06:50 | 3551045 de3de8
de3de8's picture

Dp

Sat, 05/11/2013 - 08:58 | 3551168 Go Tribe
Go Tribe's picture

There's just not enough real wealth to go around. They'll be taking every asset we own, have to in order to support their debt loads and future "investment" needs.

Sat, 05/11/2013 - 17:40 | 3552136 W T F II
W T F II's picture

Can "they" tell my VIX position from that data..??

Fri, 05/10/2013 - 20:05 | 3550253 TheSilverJournal
TheSilverJournal's picture

Adjust the equities chart to inflation and stocks look even more pathetic.

Central planning of interest rates and money printing destroys productivity as the efficient allocation of resources is severely distorted, which is why equities will prove to be a terrible investment. This does not mean to short equities, as very few asset classes will fall in value faster than the dollar.

Fri, 05/10/2013 - 20:48 | 3550351 malikai
malikai's picture

How about a chart of the S&P with the same components and ratios as the starting point? Inflation adjusted of course.

Or how about a plot of the size of the gold derivatives markets as well?

Fri, 05/10/2013 - 20:55 | 3550371 TheSilverJournal
TheSilverJournal's picture

Absolutely. And take the real inflation rate instead of the government happy face numbers. But that doesn't even do it justice as in a normal environment (where there's not rampant counterfeitting...err...money printing...err...digital currency being created with keystrokes), gains in technology leads to increasing productivity and therefore falling prices. The only way to measure this effect is to take the rate that currency is being created, not how much prices are rising.

Sat, 05/11/2013 - 14:52 | 3551820 css1971
css1971's picture

No, gold is the adjustment for inflation.

Sat, 05/11/2013 - 16:40 | 3551885 TheSilverJournal
TheSilverJournal's picture

Sorry, if that was true gold would be much much higher. The fact is there is a lot of wealth tied up in currency which will flow into gold when more faith is lost in currency, even if no more currency is created.

Edit: The truest measure is the change in money supply.

Edit 2: Another complication of measuring inflation is that fiat is a ponzi scheme which must grow or it will collapse. The beginning phase of ponzies can bring positive effects with the negative effects coming later until the ultimate hurt with the collapse of the ponzi. So just measuring the effects of the ponzi (positive at the beginnig) doesn't reveal the illusion that the ponzi creates.

Then there's the effect of centrally planning interest and government gaurantees creating contingent liabilities as well as promises of future payments that it can never make good on.

Sat, 05/11/2013 - 23:22 | 3552882 espirit
espirit's picture

The change in the money supply (to the upside) is nothing but a tax on the existing.

Sun, 05/12/2013 - 00:45 | 3553007 TheSilverJournal
TheSilverJournal's picture

Thanks. We were a little past that. Taxation is a very nice name for theft when the central planners create it out thin are and the value of the newly created fiat is gained...err...stolen from your bank account without the numbers even changing.

Fri, 05/10/2013 - 20:06 | 3550257 101 years and c...
101 years and counting's picture

Looks like gold is in a much bigger bubble than stocks. ever hear if regression to the mean?

Fri, 05/10/2013 - 20:15 | 3550275 TheSilverJournal
TheSilverJournal's picture

You do realize that the dollar is simply counterfeit gold, right? back in the day, $1 was defined as 1/20 of an oz of gold and $20 was exchangeable at the local bank for an oz of gold. The only mean here is that the counterfeits become worthless as all fiat eventually does. And with ZIRP + QE that can never be stopped and must be increased, the counterfeiting ponzi is on its last leg.

Fri, 05/10/2013 - 20:27 | 3550306 LetThemEatRand
LetThemEatRand's picture

Ponzi may be on its last leg, but he has a lot of parrots (CNBC, WSJ, Bloomberg, Congress, Ben, O, etc) and a lot of cannons.  The skull and bones are flying and this won't end with Ponzi in jail.

Fri, 05/10/2013 - 20:48 | 3550353 TheSilverJournal
TheSilverJournal's picture

Talking can do quite a bit (as they have miraculously proven by holding the ponzi together this long) but there's no amount of jabbering or brainwashing that can keep this dam from breaking for much longer.

Sat, 05/11/2013 - 07:35 | 3551079 Room 101
Room 101's picture

The question of course is the timeline.  As the Japanese have shown, they can continue this for quite awhile. 

Sat, 05/11/2013 - 10:41 | 3551268 suicidalpsychologist
suicidalpsychologist's picture

at the cost of aggravating the final outcome tenfold.

Sat, 05/11/2013 - 13:11 | 3551566 TheSilverJournal
TheSilverJournal's picture

Japan started their decline from a much stronger point with being huge exporters, whereas the US has a ginormous trade deficit. It won't be much longer.

Fri, 05/10/2013 - 22:54 | 3550662 Braverdave
Braverdave's picture

Exactly.

I am thankful my father was hoarding silver coins back in the 50's and 60's when they still made silver coins (along with a good bunch of coins from 1900ish to 1940ish that might even have some extra numismatic value). Several hundred is now worth many thousands. And he always said that those jars of old pennies would be worth more than face value.

This tradition continues with me today. Anything silver or gold represents real value and spare change is mostly converted to precious.

Sat, 05/11/2013 - 00:23 | 3550792 vulcanraven
vulcanraven's picture

Right there with you brother, my grandpa started a stack for me when I was born in 75 and educated me on the value of real money as I grew up. He passed away in '07 and I picked up where he left off.

I never really understood what he was trying to tell me until a few years ago when I started reading about the history of money and how we came to reach the point we are at right now. He also hoarded the fuck out of pre 1982 pennies, I honestly don't know what to do with all of them.

Sat, 05/11/2013 - 03:24 | 3550914 TheSilverJournal
TheSilverJournal's picture

Trade those pennies to someone for silver or platinum.

Sat, 05/11/2013 - 19:24 | 3552269 TWSceptic
TWSceptic's picture

You can't really recognize a bubble by looking at a chart. You recognize it by looking at how many people own the asset. In case of gold: almost no one.

 

Having said that, when comparing the PM bubble of 1979-1980 , corrected for inflation this chart looks like a normal bull market, not a bubble (not yet anyway).

Sat, 05/11/2013 - 21:42 | 3552589 TheSilverJournal
TheSilverJournal's picture

And to think the 1979-1980 rise in PMs took place as rates were being raised (revealing the malinvestments from ultra low rates prior decades). This big run is taking place while rates are rock botton and when the malinvestments from these last few decades are revealed, it will be a PM bull run that will be talked about for centuries and milleniums.

Fri, 05/10/2013 - 20:07 | 3550261 Pareto
Pareto's picture

I don't see ANY risk to owning gold, because, its real exchange value never changes.

Fri, 05/10/2013 - 20:19 | 3550285 SunRise
SunRise's picture

There are risks to owning or not owning everything and if you don't see ANY risks to owning it . . . . hmmmmm

Fri, 05/10/2013 - 20:25 | 3550298 Pure Evil
Pure Evil's picture

Yes there are risks to everything in life. It seems lately the greatest risk to PM's is tragically losing them in a boating accident.

Sat, 05/11/2013 - 07:38 | 3551083 Room 101
Room 101's picture

There is plenty of risk.  It's just that it's relatively less risky than other assets. 

Big risk now I see is owning a lot of $1400-$1500 per Toz gold when the price is likely to take a dump. 

Next biggest risk is NOT being in PMs some time in the fuzzy future when it's the only game left. 

Sat, 05/11/2013 - 11:21 | 3551334 Not My Real Name
Not My Real Name's picture

Big risk now is owning a lot of $1400-$1500 oz gold when the price is likely to take a dump.

Big risk now is owning a lot of $1400-$1500 oz gold and then panic-selling if the price takes a dump.

There. Fixed it.

Sat, 05/11/2013 - 15:54 | 3551953 devo
devo's picture

Price of paper is taking a dump every day, so it was a bad argument to begin with.

Sat, 05/11/2013 - 14:50 | 3551810 css1971
css1971's picture

It changes a bit. Gold/oil typically varies 10 - 20 barrels per ounce. Has done for decades. However it never ever goes exponential. That's a feature of debt.

Fri, 05/10/2013 - 20:13 | 3550269 Wave-Tech
Wave-Tech's picture

 

No, they never tell you to buy gold or sell stocks. 

It’s the TPTB’s “buy-and-hold-for-the-long-haul” meme.

 

Fri, 05/10/2013 - 20:17 | 3550277 JustObserving
JustObserving's picture

As long as wealth increases in Asia, gold will continue to trend higher as it is an ancient custom for Asians to own gold.  Real estate in China is worth $200 trillion and all the gold mined in human history is about 5.5 billion troy ounces or $8 trillion worth.  The gold bullion that is currently available for investment is only about 2 billion ounces or worth about $2.9 trillion.  Gold production every year is about $120 billion worth.

Currently just Japan and USA are printing at $160 billion a month or $1.920 trillion a year.  That is enough to buy 2/3rds of all the gold bullion in the world in a year.

The volume of fiat money printed in the world every year is more than enough to buy alll the gold bullion in this world.  Besides, US debt and unfunded liabilities increase at $8 trillion every year - enough to buy all the gold bullion in the world about three times over.

Yet the bears think that gold is overvalued.  Constant coordinated attacks by Western central banks give the illusion of weakness in gold - it is only a temporary phenomenon as physical gold migrates to the East from the West.

Fri, 05/10/2013 - 21:11 | 3550415 DoChenRollingBearing
DoChenRollingBearing's picture

Good observations.

Fri, 05/10/2013 - 21:46 | 3550510 RaceToTheBottom
RaceToTheBottom's picture

Very interesting post.  The West is accelerating its own demise.

I live in a turnaround area.  It has a large % of lower income demographics, but has very many nice things about it: views of the mountains, downtown sky scrapers, on the bus line, near the freeways, etc.  We knew that the recent realestate turmoil would hasten the gentrification of the neighborhood cause for a while people were buying flat screens so much and dumping their old big TV that you would think that TVs grew in gardens; they would put them outside in the rain until they were guaranteed worthless…  As soon as they lost their jobs, they lost the house….   Same thing going at a country level. The West is promoting its own demise….

 

Fri, 05/10/2013 - 21:51 | 3550524 blindman
blindman's picture

the obvious question:
why is the fed financing the
migration of gold from the
west to the east?
ain't that peculiar?
.
http://grooveshark.com/s/Ain+t+That+Peculiar/2MQlA8?src=5
Ain't That Peculiar by Marvin Gaye
.
"..peculiar-ality." m.g.

Fri, 05/10/2013 - 22:05 | 3550575 Al Huxley
Al Huxley's picture

I would say because

1) In their private accounts, they have plenty of gold, and probably add to it whenever the trigger a nice price break

2) in the bigger scheme of things, they don't give a fuck about 'the West', they care about their personal wealth, and personal power.

Fri, 05/10/2013 - 22:40 | 3550620 blindman
blindman's picture

Raw Video: Waters Recede Ahead of Tsunami
http://www.youtube.com/watch?v=F_kxubV9FLI
.
this video imperfectly yet immaculately
represents my response to your post.
I suspect you can appreciate
this and that.
I agree.

Fri, 05/10/2013 - 23:53 | 3550669 JustObserving
JustObserving's picture

why is the fed financing the migration of gold

The US went off the gold standard on Aug 15, 1971 due to excessive spending on the Vietnam war.  The cost of the Vietnam war was $738 billion in 2011 dollars.  The cost of the wars in Iraq and Afghanistan is expected to be $4 to $6 trillion.  If the US were on the gold standard, there is no way we could afford all our wars (or any for that matter).  But with fiat currency, all things are possible.  There is no way the US can go back to the gold standard since we have already leased out and lost our gold (that is why we take 7 years to return 300 tons of gold to Germany).

The US has always viewed gold as a threat to the domination of the dollar.  Even Volcker admitted that he suppressed gold.  Gordon Brown sold most of UK's gold for under $300 an ounce to bail out Western bullion banks from 1999 to 2002.  Greenspan and Bernanke have continued the US policy of suppressing gold and leasing out gold to control its price.

All in all, the Fed does not want the restrictions that gold imposes on their ability to print.  And if they did go to a gold standard, gold will have to be valued at $15,000 an ounce.  So it is most unlikely that the US will ever return to a gold standard.

 


 

Sat, 05/11/2013 - 00:12 | 3550780 blindman
blindman's picture

precisely.
@"So it is most unlikely that the US will ever return to a gold standard."
.
but you missed the one very significant modifier and that
modifier is "voluntarily".
peace.

Sat, 05/11/2013 - 08:34 | 3551139 Room 101
Room 101's picture

Gold IS overvalued.  For awhile.  Then it won't be.  Think July to November 2008.

Yeah, yeah, I've heard the analogy of picking up pennies in front of a bulldozer.  Gold was 910 at the beginning of July and dropped to about 710 at it's low in October 2008.  That's not pennies. 

Sat, 05/11/2013 - 13:16 | 3551582 A82EBA
A82EBA's picture

Could you put all that into a chart(s), pics=1000 words

Sat, 05/11/2013 - 18:11 | 3552180 machineh
machineh's picture

As long as wealth increases in Japan, real estate will continue to trend higher as it is an ancient custom for Japanese to own real estate.

This modified version of your quote is the expression that was heard in Tokyo in 1989.

If you aren't Asian, you think like one: CONFORMIST HERD MEMBER.

Fri, 05/10/2013 - 20:20 | 3550280 knukles
knukles's picture

Aaaarraaaaghhh!

 

sounds like when my kids were little; "todja, todja, todja, na na naahh na nah na
Fucking retards.
It's not nice to make fun of the weak and in firmed
Just you fuckers wait till I have a chance to embarrass your pestilent little asses in public...
You'll wish you had died and taken all your fucking money with you before I'm through with ya
Come on come on, I'll fightcha with one hand tied behind my back

Fri, 05/10/2013 - 21:12 | 3550418 DoChenRollingBearing
DoChenRollingBearing's picture

Ahh, what fathers have to go through, brings back MANY memories...

Fri, 05/10/2013 - 20:21 | 3550289 Yen Cross
Yen Cross's picture

    I'm converting 30% of my fiat procedes into silver and platinum. I refuse to play the ponzi stock market!

 

Fri, 05/10/2013 - 21:14 | 3550426 DoChenRollingBearing
DoChenRollingBearing's picture

That's great!  But, consider gold too.  Gold is not needed in any major industrial process, therefore you do not hurt any sector by with holding supplies (FOFOA's "Superorganism" idea) when you buy and hold it.

Fri, 05/10/2013 - 23:10 | 3550693 Kirk2NCC1701
Kirk2NCC1701's picture

Sorry, you're wrong. Gold IS used in industry, especially hi-tech. The fact that it does not rust ('oxidize') is why it's been used for industrial apps for millennia. And a major reason as money. Think "No Rust!"

Sat, 05/11/2013 - 13:40 | 3551337 Rustysilver
Rustysilver's picture

Kirk,

Gold is a very good conductor of electricity. BY DEFINITION COPPER =100%. Gold is about 105%.

That's why a lot of high end cable contacts are coded with gold.

Sat, 05/11/2013 - 16:46 | 3552053 tenpanhandle
tenpanhandle's picture

and I thought code was just ones and zeros.

Sat, 05/11/2013 - 13:33 | 3551620 JustObserving
JustObserving's picture

About 12% of gold mined every year is used up in applications - that is about $15 billion worth out of $120 billion mined.

Fri, 05/10/2013 - 20:26 | 3550302 q99x2
q99x2's picture

How do you get a portfolio?

The Morgue moved all that gold out of Fort Knox and out of NY. Replaced it with paper gold they did.

Fri, 05/10/2013 - 20:50 | 3550358 Yen Cross
Yen Cross's picture

   Portfolio is an adverb in my "crusty password protected"' note pad.

Fri, 05/10/2013 - 20:45 | 3550342 blindman
blindman's picture

what he said !

Fri, 05/10/2013 - 20:55 | 3550370 nestle
nestle's picture

GOLD IS DEAD MOFOs!!

But worry not.  once I cover my shorts, it will resurrect.

Fri, 05/10/2013 - 21:22 | 3550448 nmewn
nmewn's picture

Cover your shorts in what?

Fri, 05/10/2013 - 23:41 | 3550739 Dr. Engali
Dr. Engali's picture

Hey nmewn congratulations on your Hoyt purchase. Which one did you get? I've been a Hoyt shooter all my life. I'm shooting a Carbon Matrix right now. I also shoot a Black Widow recurve.

Sat, 05/11/2013 - 18:01 | 3552123 nmewn
nmewn's picture

I got a practically new Prowler reflex from a local pawn shop. Hard case, whisker biscuit, sights, quiver, trigger, the whole smear for a $199.

Had it tuned up a little and went out in the backyard yesterday evening and it shoots smooth. At 61lbs I felt like I could hold it back all night, no vibration and dead on @ 30yds...I mean its suweeet ;-)

Sat, 05/11/2013 - 19:35 | 3552256 Dr. Engali
Dr. Engali's picture

You got one hell of a deal on that bow. I actually have that model. I paid $350 for it bare boned out the door when they discontinued that line, and that was a good price at the time.I like that bow a lot, it's very light and easy to manuver in tight places. That would still be my primary bow if good fortune hadn't smiled on me with the opportunity to pick up my current bow a geart price. Good luck and good shooting.

Sat, 05/11/2013 - 20:06 | 3552348 nmewn
nmewn's picture

Thanks, I love it!

If it wasn't raining I'd be shooting it now ;-)

Fri, 05/10/2013 - 21:48 | 3550516 RaceToTheBottom
RaceToTheBottom's picture

I believe your shorts are already covered....  Wheeeww...

Sun, 05/12/2013 - 01:32 | 3553054 nathan1234
nathan1234's picture

You will not only loose your shorts but your underwear as well if you have not covered by now.

What will then be very visible is quite evident and what is what you are!

 

Fri, 05/10/2013 - 21:49 | 3550518 Roadhog
Roadhog's picture

When the prime real estate corners in all maors cities in america that have "WE BUY GOLD" stores start closing then I will sell my AU! Who is it that can afford those properties? Who is buying and Why? Sheeple drive buy everyday and don't get it. What other stores say "WE BUY" goods from the public?

Fri, 05/10/2013 - 22:35 | 3550634 blindman
blindman's picture

1.) do not sell your ....
2.) @"who is it that can afford..?"
renters of distressed commercial land lords.
3.) the buyers are in the "city", them and
refiners.
4.) @"why"? because the "stuff" is being bought
really cheap. really cheap. really cheap.
5.) @" What other stores say "WE BUY" goods from the public?"
none.
well done !

Fri, 05/10/2013 - 23:05 | 3550680 Kirk2NCC1701
Kirk2NCC1701's picture

When ZH gets ahead of a story, it rejoices and its followers applaud or salute.

Well, 'Bitchez', it's time for me to do the same to ZH. Again.

At 18:56 today I posted a blog on the Mark Faber article, in which I cited Brent Johnson of Santiago Capital with the very info contained in this post.

What can 'we*' say?

* Tounge-in-cheek reference to a royal 'We'.

Fri, 05/10/2013 - 23:55 | 3550754 WTFUD
WTFUD's picture

Divorce from the first wife cost me 16 oz of Gold; the 2nd 35 oz; twice bitten i married the remaining 132 oz in a small but touching private ceramony. Like any couple we have our ups and downs but she's promised never to leave me. Call me sentimental!

Sat, 05/11/2013 - 02:50 | 3550890 blindman
blindman's picture

wake up
.
in the mean time
.
Kentucky Avenue by Tom Waits
http://grooveshark.com/s/Kentucky+Avenue/98NP3?src=5

Sat, 05/11/2013 - 11:25 | 3551343 Rustysilver
Rustysilver's picture

WTFUD,

By my math you are moving up on the curve.

Sat, 05/11/2013 - 12:19 | 3551469 are we there yet
are we there yet's picture

If you have any silver children they will comfort you in retirement as much as your faithful 132 oz golden trophy wife ( if I understand your anology)

Sat, 05/11/2013 - 13:20 | 3551590 WTFUD
WTFUD's picture

50 kilos of silver and adding lads, thanks! This is the long term investment for the kids.

Sat, 05/11/2013 - 12:22 | 3551476 JumpinJonnyK
JumpinJonnyK's picture

This is why I have been buying gold and silver for years.  It pisses me off the premium on junk silver coins has gone up so much.  It shows the public is not selling them back to dealers (and hasn't been for a long time).  If you're someone looking to track the value of junk silver coins this is the best site I have found: http://www.coinvalues.com/silver

 

Does anyone know of a dealer that has junk silver in stock for a reasonable premium?

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