Visualizing The Great Gold Rout

Tyler Durden's picture




 

After a decade long rally, gold recroded its biggest two-day drop in 30 years during April. What caused this sudden decline? Is the gold cycle over, or is this just a dip in the market?

 

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Thu, 05/16/2013 - 18:07 | 3570923 Divine Wind
Divine Wind's picture

 

 

Keep the phyz, and the faith.

Thu, 05/16/2013 - 18:11 | 3570936 Devotional
Devotional's picture

I am keeping my physical but I am beginning to worry ... should I worry???

Thu, 05/16/2013 - 18:13 | 3570940 SilverIsKing
SilverIsKing's picture

Worry about what?

Thu, 05/16/2013 - 18:20 | 3570953 Devotional
Devotional's picture

should I worry about the value going to the dogs?

Thu, 05/16/2013 - 18:23 | 3570962 espirit
espirit's picture

As the price goes down, I'm going to keep buying until there isn't any more.

SOP in Bizzaro World.

Thu, 05/16/2013 - 18:41 | 3571011 lasvegaspersona
lasvegaspersona's picture

A paper market in gold will always go lower without support. Support has been withdrawn. The paper gold market is dead. After that we will get a physical only market if we are lucky.

Thu, 05/16/2013 - 19:38 | 3571126 malikai
malikai's picture

All I wanna know is..

Can I buy gold with an EBT card?

Thu, 05/16/2013 - 19:47 | 3571147 nmewn
nmewn's picture

Yes!

But ya gotta use the ATM outside the local titty bar.

Thu, 05/16/2013 - 22:04 | 3571475 Harlequin001
Harlequin001's picture

This is bullshit. Ask yourself this, if we live in a world where any central bank can print enough new money to buy all the worlds' gold, why isn't it constantly being shipped from one country to another at ever increasing prices? Why are China and Russia constrained to adding to their reserves FROM MINIMG SUPPLIES, and why will it take 7 years to repatriate one 10th of Germany's gold to the Bundesbank?

The answer is that gold is still, and has been for 50 years now the only 'commodity' that isn't for sale FOR ANY AMOUNT OF PAPER MONEY in the central banking system.

Why is that?

The answer is IMO because TPTB after WWII required collateral to make loans to rebuild a devastated Germany and Europe post war when there was no effective collateral other than gold. They needed to create new collateral to fund the rebuild, fast, and that collateral was debt. It was a requirement. They've done this before, they know how this ends, they knew how this would end back then and so do we now if you have any sense. It ends in both inflation and default, and when it does the only countries with gold will still be the post WWII powers i.e England and the US. Every other country including Asia knows that when the default finally comes the asset side of their now somewhat T Bill bloated balance sheets will implode, counterparty risk will be 100% and they will have no gold for their currency.

Try as they might there is no way the Fed or the BoE will allow any central bank to take gold paid for in post war fiat hence China and Russia scrabbling for mining supply.

If you want to go invest in the stock market go knock yourself out, I'm sure when push comes to shove you will find plenty of very tall fiat paid for buildings to jump off.

Me, I've got gold so I'm still struggling to give a shit.

Thu, 05/16/2013 - 22:17 | 3571513 nmewn
nmewn's picture

Excellent summation.

Thu, 05/16/2013 - 22:27 | 3571538 Harlequin001
Harlequin001's picture

Thanks, the gold market always was and still is THE most important market in the world, ever.

All these efforts at reducing interest rates are all ultimately to one end, to suppress the real price of gold, and they and we know it...

Let's face it, it might be some time before the gold price goes up, but ultimately it will be the only thing left.

So where's the risk? The answer is tax, watch out for that...

'The tax man cometh, and he drives a big fucking truck'

Thu, 05/16/2013 - 22:40 | 3571612 nmewn
nmewn's picture

Understood...but the tax man doesn't know what fiat "price" I exchanged at...the date is only when it was minted, not when I exchanged.

It could have been yesterday or forty years ago. So its an issue of trust without a paper trail.

And time is one of their mechanisms for assessing value...and so it is with me. Of course we already know how trustworthy and above board they are, with the news of late ;-)

Thu, 05/16/2013 - 22:50 | 3571657 Harlequin001
Harlequin001's picture

True. I think we've had this discussion before, my choice is to hold my gold in a different country in a recognised vault and behind a compliant tax plan.

The tax office is not one I'd choose to pick a fight with.

Different horses for different courses I suppose...

Fri, 05/17/2013 - 07:01 | 3572191 nmewn
nmewn's picture

lol...well stated.

I'm not picking a fight with them but they extract their tax at the point of my earning it, before I even get my hands on it. Federal, progressive income taxation.

In a fair tax system that should be the end of it. Now that would make a great separate ZH post, to see how the statists define "fairness".

Fri, 05/17/2013 - 01:51 | 3571970 BringOnTheAsteroid
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How big a truck do you need to collect something that was lost in a tragic boating accident.

Fri, 05/17/2013 - 07:03 | 3572195 nmewn
nmewn's picture

You'd be surprised how many boats I've lost over the years.

So I'm thinking I could do it on a motorcycle ;-)

Fri, 05/17/2013 - 13:38 | 3573453 DadzMad
DadzMad's picture

+1 for "I'm struggling to give a shit".  I'm going to borrow that one.

Thu, 05/16/2013 - 21:20 | 3571363 auric1234
auric1234's picture

I recognise your FOFOA-speak but can't understand it.

What does "support" mean?

 

Fri, 05/17/2013 - 02:47 | 3572015 dunce
dunce's picture

I think it is like a jock strap, it holds your family treasures safe and secure.

Thu, 05/16/2013 - 18:25 | 3570970 jimmytorpedo
jimmytorpedo's picture

my dogs eat gold for breakfast

Thu, 05/16/2013 - 18:26 | 3570973 blindman
blindman's picture

dogs eat their own shit, not gold. they have
no use for it.

Thu, 05/16/2013 - 18:36 | 3570997 SilverIsKing
SilverIsKing's picture

Gold dogs only.  The value of those paper dollars will eventually go to the junkyard dogs.

Thu, 05/16/2013 - 18:41 | 3571010 bank guy in Brussels
bank guy in Brussels's picture

No you should not worry about your gold

In Europe our fondness and respect for the value of gold is very, very ancient ... it goes back centuries.

Unlike Americans, we tend not to talk about it, partly because money-talk is often not so 'polite' here ... and partly because with things like gold, the value is assumed and understood, more than discussed.

Europe has seen revolutions, wars, foreign military occupation on a grand scale ... still within the living memory of elderly Europeans

Currencies come and go ... governments and armies come and go ... we know that here, so the place of gold among assets is almost instinctive ... we don't doubt gold's value ... this recent volatility in 'paper gold prices' barely registers with us. We think more of ounces and grammes.

When the Nazis occupied Belgium in the 1940s, a lot of gold went buried deeply into the garden dirt ... and stayed there till after the swastika flags were gone.

There is lots of gold here, very quietly ... no one really knows how much, because it is truly 'private' here, ha! (lots of privately-owned guns here, too, which we also don't discuss that much) ... Both the guns and the gold were useful for surviving the Nazi era ... and as we know in Europe, the wheel of history can turn

Keep the gold ... and the guns ... and like they say, a getaway or at least hiding-the-assets plan

Thu, 05/16/2013 - 18:45 | 3571022 Devotional
Devotional's picture

now that is a reassuring comment! Thanks :)

Thu, 05/16/2013 - 18:46 | 3571026 Devotional
Devotional's picture

now that is a reassuring comment! Thanks :)

Thu, 05/16/2013 - 18:48 | 3571028 The Shootist
The Shootist's picture

Good to know. Here in 'Merica, we're pretty dumb.

Thu, 05/16/2013 - 18:57 | 3571052 knukles
knukles's picture

Huh?

 

Hey Madge, git me 'nuther beer, girl.

Thu, 05/16/2013 - 19:02 | 3571066 nmewn
nmewn's picture

In Amurika the one demanding is now named Clara ;-) 

(Burb!)

Such a sweet couple...lol.

Fri, 05/17/2013 - 02:53 | 3572017 dunce
dunce's picture

Black plastic sewer drain pipe is cheap and rugged and makes a good underground vault and if you rent a post hole digger the metal will be deep enough not to show up on a metal detector.

Thu, 05/16/2013 - 18:22 | 3570958 Hangfire
Hangfire's picture

The only thing you should be worried about is that the IRS now knows you have gold.  Get ready for the audit!    

Thu, 05/16/2013 - 18:26 | 3570974 Devotional
Devotional's picture

luckily i am across the atlantic :)

i have read what the IRS has been doing in the USA. Sad to say the least and that is something Zimbabwe or any other dictatorship would do. Sorry guys, you ain't in the land of the free no more :(

Thu, 05/16/2013 - 18:50 | 3571032 nmewn
nmewn's picture

First post...4/25/2013...I don't think you've fought yet, its in the rules.

"Should I worry?"

Thu, 05/16/2013 - 18:59 | 3571056 knukles
knukles's picture

Punch him. nmewn.

 

 

Wherz thet God damn beer, Madge?

Thu, 05/16/2013 - 19:49 | 3571153 Hulk
Hulk's picture

Yah, Yah, hit him so hard that he'll see stars, bars and old popeye cartoons !!!

Fri, 05/17/2013 - 01:39 | 3571954 StychoKiller
StychoKiller's picture

"I'm gonna beat you till candy comes out!"

Thu, 05/16/2013 - 19:01 | 3571062 Devotional
Devotional's picture

true, i just signed up recently. so, where is the fight? I am in!

Thu, 05/16/2013 - 19:04 | 3571067 nmewn
nmewn's picture

;-) 

Why do you value gold in fiat...were you programed that way?

Thu, 05/16/2013 - 19:19 | 3571097 knukles
knukles's picture

Kick him in the nuts when he ain't lookin' nmewn

 

Madge, where's that fucking beer, woman?

Thu, 05/16/2013 - 19:50 | 3571157 Hulk
Hulk's picture

You lost already man, better cut back on the alcohol...

(Stop getting him that beer Marge)

(but she do like it when he has his beer goggles on...)

Thu, 05/16/2013 - 20:06 | 3571197 Harbanger
Harbanger's picture

"luckily i am across the atlantic :)"

That made me laugh.  No one will watch your back like your brothers in spirit.  Mark my words, you will be tested and asked.. "who are you Mo Fo."

Thu, 05/16/2013 - 18:26 | 3570977 oddjob
oddjob's picture

Tell them you traded it for crack.

Thu, 05/16/2013 - 18:29 | 3570983 TeamDepends
TeamDepends's picture

Come and git it, boys!  The IRS just dipped below cockroaches on the "necessary life form hierarchy" for most Americans, and will be dealt with as such.

Thu, 05/16/2013 - 19:17 | 3571088 klockwerks
klockwerks's picture

For what it's worth, went down to the wholesaler to pick up another MB this week and asked him whether gold was reportable. Just some but not eagles in rolls.

Fri, 05/17/2013 - 02:00 | 3571984 BringOnTheAsteroid
BringOnTheAsteroid's picture

You people are really struggling to grasp the hole in bottom of boat concept today.

This is the one of the truly valuable characteristics of gold that often gets over looked. It is one of THE ONLY entities that has intrinsic value (rarity) that can be held completety outside of the banking system and away from prying and despotic government hands.

Power hates gold, hates it to it's very last atom. It's something TPTB cannot control. Real estate can be seen and taxed, stocks can be taxed if they don't just vanish, bank accounts can be stolen, . Gold, tragically lost in a boating accident cannot be traced, ever and this is like an ice pick in the temple of tyranny.

Fri, 05/17/2013 - 02:00 | 3571985 BringOnTheAsteroid
BringOnTheAsteroid's picture

You people are really struggling to grasp the hole in bottom of boat concept today.

This is the one of the truly valuable characteristics of gold that often gets over looked. It is one of THE ONLY entities that has intrinsic value (rarity) that can be held completety outside of the banking system and away from prying and despotic government hands.

Power hates gold, hates it to it's very last atom. It's something TPTB cannot control. Real estate can be seen and taxed, stocks can be taxed if they don't just vanish, bank accounts can be stolen, . Gold, tragically lost in a boating accident cannot be traced, ever and this is like an ice pick in the temple of tyranny.

Fri, 05/17/2013 - 07:10 | 3572201 BringOnTheAsteroid
BringOnTheAsteroid's picture

Oi, who down arrowed that, bit harsh isn't it . . . . . oh, I get it, double post.

Thu, 05/16/2013 - 18:23 | 3570965 blindman
blindman's picture

don't worry, be happy.
you have not been foolish, right?

Thu, 05/16/2013 - 22:37 | 3571578 MFLTucson
MFLTucson's picture

This fiat fraud will end when you least expect it and the last man standing will own Gold, not Google stock.

Fri, 05/17/2013 - 00:18 | 3571847 MicroSecession
MicroSecession's picture

If you have physical gold for the right reasons there is no reason to worry.  If you have your heart tied to the $$ value of your portfolio, feel free to worry.  If, instead, you are looking for a multigenerational store of value, then you shouldn't worry at all.

Fri, 05/17/2013 - 04:04 | 3572062 natty light
natty light's picture

You can eat with gold.

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