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Guest Post: The Geopolitics Of Gold

Tyler Durden's picture


Submitted by Alasdair Macleod of,

Western central banks have got themselves horribly wrong-footed as a result of not adjusting their anti-gold policies to allow for the realities of Asian gold demand. Though their dealings are shrouded in secrecy, there is compelling evidence that much – if not most – of Western central bank gold has been quietly sold over the last three decades.

More recently all members of the Shanghai Cooperation Organisation, a common security and trading bloc led by Russia and China and incorporating the bulk of Asia’s land mass, have been accumulating gold. Between current SCO and future members (India, Iran, Afghanistan, Mongolia, Belarus and Sri Lanka), with their citizens numbering over 3 billion people, they have together cornered the global market for physical supply, without even taking account of demand from the rest of South East Asia’s gold-hungry population.

The result is that gold markets are now failing to clear. The outcome is a choice: the West will either have to stop intervening and allow gold to find a level where physical and derivative markets interact properly with each other, or capital markets in the West will face a growing crisis likely to spill over into other markets. While these outcomes were always going to be a choice to be made at some time in the future, the disconnection between physical gold and derivatives has become so great that it is now an immediate concern.

At the government level it is a geopolitical clash of the titans. Russia and China are almost certainly aware of the lack of gold in Western central bank vaults: they are fully capable of thorough due-diligence in this respect. They have so far been careful not to disrupt capital markets because it has not been in their interests to do so; however, the current hiatus in gold markets is almost certain to modify their view.

Fundamental to all this is their attitude to Western currencies: the yen is now collapsing, the euro area is in deep trouble and the US economy is at very best stagnating. Until now, payment for Russian energy and Chinese goods in foreign currencies has been welcomed, because it has allowed the Russian and Chinese elites and middle classes to accumulate wealth. This balance of interests can only be maintained for so long as Russian and Chinese governments and their citizens can hedge foreign currency risks through an offsetting accumulation of foreign-owned gold.

This is no longer the case, because to all intents and purposes western capital markets are cleaned out of physical supplies, and the ability of the Western central banks to supress gold prices appears to be ending. And with the West’s financial system no longer able to deliver their most prized commodity, hitherto passive attitudes in Asia to Western currencies are likely to be reassessed.

The gold question has become central to east-west trade. The sensible approach for Western central banks is to defuse the problems arising by taking positive steps to ensure that gold markets operate properly. This is conceptually difficult, because the most likely result, a higher gold price, would risk undermining confidence in the major currencies and most probably damage the bullion banks in London.

Despite these difficulties, realities have to be faced.


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Mon, 05/27/2013 - 16:53 | 3601825 Arrowflinger
Arrowflinger's picture

Nothing from nothing leaves nothing, you gotta have something if you wanna be free.....


Mon, 05/27/2013 - 17:07 | 3601856 zorba THE GREEK
zorba THE GREEK's picture

When fiat fails, and it will, it always does, The Western World will have nothing to back a new

currency with and Asia will rise up and be on top, while the West goes into a deep dark hole.

The Dark Ages may be returning soon for The West.

Mon, 05/27/2013 - 17:12 | 3601868 Pladizow
Pladizow's picture

"You can ignore reality, but you can't ignore the consequences of ignoring reality." - Ayn Rand

Mon, 05/27/2013 - 17:39 | 3601945 nope-1004
nope-1004's picture

Can u repeat that?


Tue, 05/28/2013 - 08:28 | 3603087 Pinto Currency
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It is notable that the chatter about "tapering" (we're gonna do it, we're gonna do it) has arisen post Cyprus as investors in the West, realizing that their assets are at risk, pull gold from the financial system and we now find ourselves in a gold supply crisis at the LBMA in particular and in the mid-east and Asia in general.

The scramble is on and has revealed fraud by funds and banks to many who thought that they owned gold as they now try to secure their property.  The gold run will not stop.

Mon, 05/27/2013 - 18:00 | 3601995 Stuck on Zero
Stuck on Zero's picture

Can you ignore the consequences of ignoring reality?


Mon, 05/27/2013 - 19:37 | 3602182 Dead Canary
Dead Canary's picture

"Just because you do not take an interest in politics
doesn't mean politics won't take an interest in you."

~ Pericles

Mon, 05/27/2013 - 19:50 | 3602227 This just in
This just in's picture

Just because you don't have an interest in my crotch doesn't mean that my crotch won't take an interest in you.


Mon, 05/27/2013 - 20:35 | 3602318 Dead Canary
Dead Canary's picture

That's bloody brilliant!

Tue, 05/28/2013 - 01:43 | 3602829 TwoShortPlanks
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The potential future purchasing power of physical Gold as an asset can be best explained in six ways;

1.       Analogy: Principles of extracting power from explosive material

2.       Analogy: Rothschild’s cornering of post war European Debt

3.       The removal of mass ignorance and the Impossibility Bias

4.       Trust within the [Mercantile] Exchanges, Commodity Trading Centres and Supply Chains

5.       Financial Markets

6.       The ‘Permanent Squeeze

7 pages as to why I believe Gold is about to go off like a Belt-Fed Mortar!

Tue, 05/28/2013 - 05:53 | 3602959 IBelieveInMagic
IBelieveInMagic's picture

Not so fast. As long as we are able to 'persuade' ME oil to be denominated in dollah, our currency will continue to have value. The cost of 'changing' this arrangement is very high for other players and hence they continue to play along.

Mon, 05/27/2013 - 21:19 | 3602418 Seeking Aphids
Seeking Aphids's picture

The real question is: can you ignore the reality of ignoring the consequences of ignoring reality. The answer is: 46.

Tue, 05/28/2013 - 03:52 | 3602903 jeff montanye
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it was 42 but there has been some improperly acknowledged inflation.

Tue, 05/28/2013 - 05:05 | 3602938 savagegoose
savagegoose's picture

yu forgot to account for inflation

Tue, 05/28/2013 - 07:26 | 3603016 Dead Canary
Dead Canary's picture

Don't forget  the 1/3 unemployed on the B ark.

Mon, 05/27/2013 - 23:07 | 3602638 WezTheJuic
WezTheJuic's picture

Indocrination, indoctrination.  What a beautiful world.


So, the question is this.  "Do you want to move forward, or do you want to move back?"



Mon, 05/27/2013 - 17:12 | 3601869 Pladizow
Pladizow's picture

"You can ignore reality, but you can't ignore the consequences of ignoring reality." - Ayn Rand

Mon, 05/27/2013 - 17:15 | 3601872 Hulk
Hulk's picture

You can say that again...

Mon, 05/27/2013 - 17:23 | 3601894 knukles
knukles's picture

Look at it this way.

If one keeps the price of a good artificially below its justified clearing price, demand will not subside and buyers will eat up supply.

Now, apply such to western central banks keeping the price of gold artificially low.
And what happens?
The Law of Unintended Consequences suggests that somebody somewhere is gonna soak up the supply of cheap gold.

What could go wrong?

And these guys who think they live in a world of no leakages, frictions or realities are the ones trying to establish a NWO.

Tell ya what.  I'll take any of that barbaric relic off your hands that you don't want for tradition's sake.

Mon, 05/27/2013 - 17:35 | 3601931 Hulk
Hulk's picture

Its sad indeed, but fraud and corruption always lead to destruction...

Mon, 05/27/2013 - 18:44 | 3602072 tbd108
tbd108's picture

There is nothing sad when someone who needs a good kick in the teeth gets one. In fact, I find it very satisfying especially when you're dealing with vicious, thieving bullies.

Mon, 05/27/2013 - 19:21 | 3602149 Ignorance is bliss
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Unfortunately the kick in the teeth is aimed at the entire U.S. population, not just those that deserve to be punished for their malfeasance.

Tue, 05/28/2013 - 03:59 | 3602910 jeff montanye
jeff montanye's picture

the mass of the population actually will be shocked to learn that the gold in fort knox, etc. is no longer close to 8,000 tons.  even if the relative truth of 9-11 slips out, i doubt any heads will roll in any significant sense.  

if jon corzine still walks free and bradley manning is still in jail we will know that orwell was right on the money (and everything else).

Mon, 05/27/2013 - 19:16 | 3602132 cro_maat
cro_maat's picture

What if... China has told Benny Boy that they are willing to unleash all of those US Treasuries that they own on the market.... unless the bullion banks beat down the price of gold so that they can accumulate more. No matter which way you look at it the Fed and its crony circle looks to have a weak hand.

Mon, 05/27/2013 - 19:23 | 3602153 OpenThePodBayDoorHAL
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Jim Rickards sys its the Chinese themselves who are beating up the paper gold price. Same objective, get gold at better prices. Everybody needs the Chinese to catch up their gold stores before the next global Bretton Woods reset. Just like France & Germany got a chance to rebuild their horde before the original Bretton Woods. Otherwise it's like starting a poker game and everybody has a different amount of chips.

Mon, 05/27/2013 - 17:27 | 3601910 GVB
GVB's picture

We first have to enter the stage of restriction in cash payments. Only electronic money transfers as from then. Capital controls. That's the final stage. Would not surprise me as governments and banking cartels will do "whatever it takes" remember Draghi? Of course I'm not sure but that's my best guess.

Mon, 05/27/2013 - 21:05 | 3602375 s-logic
s-logic's picture

Folks, I'm reading all your comments and thinking, you people all are really that stupid here, aren't you? The US has nothing to back it up because gold is all gone?????!

How many aircraft carriers does the US have? Something in the range of 15. Russia, one. China? None I guess. The US has the most powerful military in the world. So much more powerful, that the rest of the world is not even competing here. So if tomorrow the US says to China to go fuck themselves, what's China to do? Most likely, they will go and follow the advice, because there's nothing else they can really do. It applies to Russia even more so. I come from there, I know that for sure. In the end, it all comes down to military power, always.  Come on people, don't sell yourselves short. Be patriots.

BTW, regarding gold. In the soviet union even during hyperinflation, gold was non-existent. Why? Because, it was illegal to trade gold. Or the tax on each transaction was, like, 20-30% of the said gold transaction. So here it goes. The only thing the US government has to do to solve the gold problem, is to make gold illegal. Or better, expropriate it for the good of the people from the smart asses like yourselves. If Ben was bold enough to print like crazy, and the US president was bold enough to use drones to commit murders around the world, do you really think they will not make gold illegal when the time comes????!

Boy, you all really must be that stupid.

Mon, 05/27/2013 - 21:17 | 3602414 Missiondweller
Missiondweller's picture

Gold? What gold?

Every damn one of us lost our gold in a tragic boating accident.

We are, however, going on a trip abroad. Probably via the Mexican border.

Tue, 05/28/2013 - 08:01 | 3603059 samcontrol
samcontrol's picture

Your plan is Mexico? lol. good luckwith that.

Mon, 05/27/2013 - 21:32 | 3602440 Seeking Aphids
Seeking Aphids's picture

Yes, US has aircraft carriers...China has one that they got from Russia on sale.....but guess what, Russian fellow, there is more to the world of war than tanks and aircraft carriers....but I won't bore you with the details. As for the US making gold are missing the point. No one will give a flying fuck what the US does with its gold.....the rest of the world will have moved on. The real question is when will the $US stop being the reserve guess is a Tuesday (lucky day in North America!) in November (after the German elections).


Mon, 05/27/2013 - 21:35 | 3602447 sgorem
sgorem's picture

"you people all are really that stupid here, aren't you?" wtf? i have to apologize up front for all us zher's because you must have mistaken us all for a group that gives a flying fuck what you perceive. fucking trollite..

Mon, 05/27/2013 - 22:47 | 3602594 cornflakesdisease
cornflakesdisease's picture

I think you're the one who's "stupid'

It isn't about countries or whoes military has the sharpest stick.  China and The US are controlled by the same globalist as is Russia.  The real power is central banks and the BIS.


Mon, 05/27/2013 - 23:43 | 3602681 ATG
ATG's picture

Speaking of stupid:


Lessee, counting the USS Ronald Reagan that just came out of 18 months of Fukushima decontamination with Hanford, 10, many of them in port or Refueling and Complex Overhaul, with two more Gerald Ford Class, including the JFK and new Enterprise, in the works at >$12.3 B each.


And every one of them a sitting duck for the new Dong Feng 21D missiles deployed in the Taiwan Straits with a range of 3000 klicks, a speed of Mach 10 and reliable evasive navigation, thank you Bernie, Billary, Ron, Vince and Loral. 


Since China and Russia trade weapons now to guard their interests in Syria and Iran, might explain just why we are not floating carrier ships in harm's way lately...

Tue, 05/28/2013 - 00:15 | 3602734 Professorlocknload
Professorlocknload's picture

So, you lost your gold in an Aircraft Carrier accident, there logic?

Tue, 05/28/2013 - 04:30 | 3602926 jeff montanye
jeff montanye's picture

yes we kicked ass from vietnam to afghanistan: 


I met a traveller from an antique land

Who said: "Two vast and trunkless legs of stone

Stand in the desert. Near them on the sand,

Half sunk, a shattered visage lies, whose frown

And wrinkled lip and sneer of cold command

Tell that its sculptor well those passions read

Which yet survive, stamped on these lifeless things,

The hand that mocked them and the heart that fed.

And on the pedestal these words appear:

`My name is Ozymandias, King of Kings:

Look on my works, ye mighty, and despair!'

Nothing beside remains. Round the decay

Of that colossal wreck, boundless and bare,

The lone and level sands stretch far away". 

Percy Bysshe Shelley, 1818



Tue, 05/28/2013 - 05:27 | 3602948 lord of the flies
lord of the flies's picture

us military will overcome ww3 are you sure? watch this first before confirming your optimistic assumption!

Tue, 05/28/2013 - 05:48 | 3602955 constantine
constantine's picture

Didn't Russia have a military comparable to the USA's in the past?  Oh yeah, their currency collapsed and now the vast majority is rotting in shipyards.  If the USA makes gold illegal, where do you think the value of the greenback has gone?  Making it illegal at that point would have been irrelevant and most people will just hold onto the metal until better times regardless of taxes or legality.  Some of your points are somewhat valid; clearly they will wage any war possible against gold and, for this reason, diversification is important.  The last couple of years are testimony to this... however, most gold bashers have probably missed the move since the early 2000's... it is too difficult for them to capitulate psychologically and admit they were/are wrong so they sit on the sidelines ridiculing it and, deep down inside, praying that their financial overlords are successful in it's continued suppression regardless of what it means on a deeper level; that their financial lives are now controlled by greedy slime and their algorithms.

Tue, 05/28/2013 - 10:23 | 3603440 e-recep
e-recep's picture

the might roman army couldn't save rome's ass because their economy was totally fucked. if you want the army to function you gotta have sound economy backing it up. no army can stay upright if the economy is in the shitters.

Mon, 05/27/2013 - 17:44 | 3601959 Groundhog Day
Groundhog Day's picture

What we need now is someone like alexander the great to rob and pillage the gold of these countries and bring it back to the west again.

Mon, 05/27/2013 - 19:53 | 3602235 This just in
This just in's picture

John Corzine?

Tue, 05/28/2013 - 00:06 | 3602722 InTheLandOfTheBlind
InTheLandOfTheBlind's picture

Marc Rich?

Tue, 05/28/2013 - 00:34 | 3602764 hunglow
hunglow's picture

Pussy, power & gold. Or planes, boats & pussy... What ever...

Mon, 05/27/2013 - 16:59 | 3601835 francis_sawyer
francis_sawyer's picture

Won't those silly Asians be in for a surprise someday when they wake up & find out that gold isn't 'backed' by anything...

Mon, 05/27/2013 - 17:05 | 3601851 Mister Ponzi
Mister Ponzi's picture

Our paper gold is backed by physical tungsten, at least.

Mon, 05/27/2013 - 17:11 | 3601863 orez65
orez65's picture

Gold doesn't need to be backed by anything because it is money!!!!!!!!!!!!!!! !!!!!!

Mon, 05/27/2013 - 17:26 | 3601904 francis_sawyer
francis_sawyer's picture

gold is backed by lead...

Mon, 05/27/2013 - 23:41 | 3602692 jerry_theking_lawler
jerry_theking_lawler's picture

wow, my gold is backed by fiberglass.....and water.

Mon, 05/27/2013 - 17:27 | 3601909 Canadian Dirtlump
Canadian Dirtlump's picture

you sure dog? I recall this pearl of idiocy from one of the local newscasters.



Mon, 05/27/2013 - 18:16 | 3602027 JeffB
JeffB's picture

Hilarious. Thanks for that laugh.

Unfortunately, the last laugh will be on us. What a complete airhead. But I guess they're a dime a dozen. Hire some pretty girl to read what you want in front of a TV camera and the zombie populace will accept it at face value.


Tue, 05/28/2013 - 00:25 | 3602751 Professorlocknload
Professorlocknload's picture

Ha! Investors aren't " Com-Fort-Ta-Bull" in anything but the dollar. eh?

Why, I Didn't know that. Thanks Ms. Muppet.

Where does MSM get these pieces of work?

Mon, 05/27/2013 - 18:43 | 3602074 css1971
css1971's picture

No. It's simpler. Gold is backed by human nature.

Mon, 05/27/2013 - 18:58 | 3602103 filament
filament's picture

Wait!!!   What???  I thought it was backed by Bitcoin?

Mon, 05/27/2013 - 21:18 | 3602416 Missiondweller
Missiondweller's picture


Mon, 05/27/2013 - 16:59 | 3601837 Canadian Dirtlump
Canadian Dirtlump's picture

Between a Rock and a Hard Place. I found it odd that Gigolo Jim Rickards and Max Keiser were opining that gold was being held down to allow China to "catch up" for the great currency reset..

Mon, 05/27/2013 - 17:02 | 3601842 Not Too Important
Not Too Important's picture

That is a good question that doesn't get addressed in all the gold/silver BS. What happens when the West runs out of deliverable gold? It appears the silver is about all out, too, and if I'm not mistaken, there's less silver than gold, and silver is needed in quite a bit of manufacturing.

What happens when there's no more silver, either?

Tue, 05/28/2013 - 00:32 | 3602760 Professorlocknload
Professorlocknload's picture

Doubt the West, or anywhere else will ever run out of Au/Ag

They'll just run out of cheap PM's ;)

Mon, 05/27/2013 - 17:04 | 3601847 LawsofPhysics
LawsofPhysics's picture

Does anyone else find it odd that the Asians/Indians are buying and taking possesions of gold now, while the Germans seem okay with waiting seven years to get gold that they already own back?  Seem like the whole paper/physical thing is about to blow up.  Trying to be optimistic here, but I simply must be missing something.

Mon, 05/27/2013 - 17:06 | 3601855 fonzannoon
fonzannoon's picture

There is no way the Germans are waiting. I think I saw on here a few weeks ago that while JPM's vault was being emptied DB's vault was filling up. DB is Germany.

Mon, 05/27/2013 - 17:46 | 3601964 eddiebe
eddiebe's picture

What you are missing is that Germany is still occupied while India and China aren't;besides Germany has to pretend to be part of the EU.

Mon, 05/27/2013 - 20:13 | 3602275 Stuck on Zero
Stuck on Zero's picture

Couldn't the Germans have gotten their gold back much faster by selling US Treasuries and buying gold with it?  They own $93B in TNotes. 


Mon, 05/27/2013 - 22:51 | 3602603 cornflakesdisease
cornflakesdisease's picture

Germany was told by very powerful people not to push the issue.  The gold issue was only brought up by popular supprt of the German people, not the German politicians.

Mon, 05/27/2013 - 17:07 | 3601850 Arrowflinger
Arrowflinger's picture

Fed Bank electrons sizzle and pop.

A Market player falls through his stop.

It was thought protection, he cried.

Counted on the Bernank put , but he lied


S&P Forever, the sheep flocks were sold.

Fools they fell all into Cash for Gold.

It isn't money the masses were told.

Andy Jackson weeps of trickery from old.


All that glitters is not Fed electronic cash.

Lifetime savings subject to a flash crash.

When these fraud-fraught times are done.

Freemen won't stand the shadow of a drone.


Zzzzst...and its GONE!!!!!


Mon, 05/27/2013 - 17:22 | 3601889 Arrowflinger
Arrowflinger's picture

From Jackson's Farewell Address -


"The paper system being founded on public confidence and having of itself no intrinsic value, it is liable to great and sudden fluctuations, thereby rendering property insecure and the wages of labor unsteady and uncertain. The corporations which create the paper money can not be relied upon to keep the circulating medium uniform in amount. In times of prosperity, when confidence is high, they are tempted by the prospect of gain or by the influence of those who hope to profit by it to extend their issues of paper beyond the bounds of discretion and the reasonable demands of business; and when these issues have been pushed on from day to day, until public confidence is at length shaken, then a reaction takes place, and they immediately withdraw the credits they have given, suddenly curtail their issues, and produce an unexpected and ruinous contraction of the circulating medium, which is felt by the whole community. The banks by this means save themselves, and the mischievous consequences of their imprudence or cupidity are visited upon the public"

if your currency continues as exclusively paper as it now is, it will foster this eager desire to amass wealth without labor; it will multiply the number of dependents on bank accommodations and bank favors; the temptation to obtain money at any sacrifice will become stronger and stronger, and inevitably lead to corruption, which will find its way into your public councils and destroy at no distant day the purity of your Government. Some of the evils which arise from this system of paper press with peculiar hardship upon the class of society least able to bear it. A portion of this currency frequently becamedepreciated or worthless, and all of it is easily counterfeited in such a manner as to require peculiar skill and much experience to distinguish the counterfeit from the genuine note.

"The planter, the farmer, the mechanic, and the laborer all know that their success depends upon their own industry and economy... But with overwhelming numbers and wealth on their side they are in constant danger of losing their fair influence in the Government, and with difficulty maintain their just rights against the incessant efforts daily made to encroach upon them. The mischief springs from the power which the moneyed interest derives from a paper currency which they are able to control, from the multitude of corporations with exclusive privileges which they have succeeded in obtaining in the different States, and which are employed altogether for their benefit; and unless you become more watchful in your States and check this spirit of monopoly and thirst for exclusive privileges you will in the end find that the most important powers of Government have been given or bartered away, and the control over your dearest interests has passed into the hands of these corporations. "


Mon, 05/27/2013 - 17:24 | 3601902 fonzannoon
fonzannoon's picture

He was early.

Mon, 05/27/2013 - 17:27 | 3601912 Arrowflinger
Arrowflinger's picture

And observant. Nothing ever changes, does it?

Mon, 05/27/2013 - 17:35 | 3601932 fonzannoon
fonzannoon's picture

Nope. It just gets delayed sometimes.

Mon, 05/27/2013 - 18:01 | 3602002 Arrowflinger
Arrowflinger's picture

Jackson's advice was early for us.

However, Jacksons actions in closing down a Central Bank saved the people of his day.

He was timely, principled and tough. What nearly zero of his successors have been.

We ignored his warnings and will suffer the consequences.

Mon, 05/27/2013 - 18:23 | 3602039 JeffB
JeffB's picture

Preach it brother!

Mon, 05/27/2013 - 19:29 | 3602165 natty light
natty light's picture

“Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the [public] bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves.” 

-Andrew Jackson 1832


Mon, 05/27/2013 - 19:44 | 3602212 Miss Expectations
Miss Expectations's picture

Arrowflinger, are you familiar with the Indian Removal Act of 1830?

Mon, 05/27/2013 - 22:49 | 3602598 Arrowflinger
Arrowflinger's picture

No man is perfect and Andrew Jackson left a Trail of Tears. I balance my praise for him between his role in the Battle of New Orleans, his presidency and how he brutalized the native Americans. However, it is noted that the Creeks fought with him against the British.

As much as Jackson hated the English and bankers, one can only imagine what he might have done about the London bankers.


Mon, 05/27/2013 - 19:27 | 3602164 Ignorance is bliss
Ignorance is bliss's picture

He successfully fought off the banking cabal of his age.

Mon, 05/27/2013 - 17:37 | 3601939 Hulk
Hulk's picture

There truly isn't anything new under the sun...

Mon, 05/27/2013 - 18:38 | 3602059 css1971
css1971's picture

I was going to call bollocks, there are a lot of fake quotations around. But he did indeed say that and went further.


The distress and sufferings inflicted on the people by the bank are some of the fruits of that system of policy which is continually striving to enlarge the authority of the Federal Government beyond the limits fixed by the Constitution. The powers enumerated in that instrument do not confer on Congress the right to establish such a corporation as the Bank of the United States, and the evil consequences which followed may warn us of the danger of departing from the true rule of construction and of permitting temporary circumstances or the hope of better promoting the public welfare to influence in any degree our decisions upon the extent of the authority of the General Government. Let us abide by the Constitution as it is written, or amend it in the constitutional mode if it is found to be defective.

Too late

With such a bank and a paper currency the money power would in a few years govern the State and control its measures, and if a sufficient number of States can be induced to create such establishments the time will soon come when it will again take the field against the United States and succeed in perfecting and perpetuating its organization by a charter from Congress.

Yes... well... Look! Dancing with the stars is on!

It is always in your power to see that the wishes of the people are carried into faithful execution, and their will, when once made known, must sooner or later be obeyed; and while the people remain, as I trust they ever will, uncorrupted and incorruptible, and continue watchful and jealous of their rights, the Government is safe, and the cause of freedom will continue to triumph over all its enemies.

You should read the whole thing.

So putting his face on the $20 Federal Reserve Note is really a great big "fuck you" to his memory.

Mon, 05/27/2013 - 18:59 | 3602106 Not Particular
Not Particular's picture

Michael Jackson said all that before he OD'ed? Impressive.

Mon, 05/27/2013 - 17:06 | 3601852 Bay of Pigs
Bay of Pigs's picture

The Grant Williams piece "Do the Math", featured here yesterday, was also outstanding on gold.  (starts at 33 minutes)

Mon, 05/27/2013 - 17:08 | 3601859 Arrowflinger
Arrowflinger's picture

Yes, it was BOP. Indeed it was.

Math stands next to God.

Mon, 05/27/2013 - 17:30 | 3601919 RafterManFMJ
RafterManFMJ's picture

God is math.

Mon, 05/27/2013 - 17:06 | 3601853 bullionbaron
bullionbaron's picture

"there is compelling evidence that much – if not most – of Western central bank gold has been quietly sold over the last three decades."


Hmm while I'd love to believe these stories, I have seen little more than presumptuous calculations by Sprott & Co that the west "must" have sold their Gold on the down low. However, that can hardly be considered evidence. Gold is clearly moving from west to east:

But that doesn't necessarily mean that the western central banks have sold all their gold (those who report having holdings) or that they have been actively suppressing the price. If they have been suppressing the price, they have done a lousy job over the last 10 years...

Mon, 05/27/2013 - 17:22 | 3601891 BlackChicken
BlackChicken's picture

.... If they have been suppressing the price, they have done a lousy job over the last 10 years...

That is not to hard to believe if you think about it; they have done a pretty lousy job on every other possible level. Our system is a ponzi, we have more debt than we could EVER pay, our manufacturing has been gutted, our infrastructure is decaying or outdated, and both sides of our political system are do incompetent they couldn't lead us out of a wet paper bag.

Do you really believe that th US still has much if any of our gold? Everything else we are told is a lie, why would this topic be any different?

Mon, 05/27/2013 - 18:36 | 3602060 bullionbaron
bullionbaron's picture

Maybe the Fed/Gov is also lying about having public debt and really the US is a net creditor after all these years... wouldn't that blow your mind hahaha

Mon, 05/27/2013 - 19:24 | 3602151 BlackChicken
BlackChicken's picture

They ARE lying about the public debt, it is much higher than they are telling us. Unfortunately it's not funny, as the joke/scam is on us.

What would blow my mind would be leadership that not only cared about our nation and it's future, but that was also qualified to run something more complicated than a lemonade stand.

Better yet, how about we make these pricks live by the laws they create for us and put their asses on commission without benefits until they get things fixed.

Mon, 05/27/2013 - 19:49 | 3602226 cro_maat
cro_maat's picture

How about every law that is passed must first be used on Congress starting with drug testing, vaccines and ample doses of fluoride in all of their water fountains.

Mon, 05/27/2013 - 17:23 | 3601896 Bay of Pigs
Bay of Pigs's picture

They have done a "lousy job"? LOL, what are you looking at? Trillions have gone down the rat hole (increased debt and deficits) the last two years while gold is off $500 bucks an ounce and silver has been decimated by well over half. The miners have been crushed into dust and the bullish sentiment is all the way to zero now.

Am I missing something?

Mon, 05/27/2013 - 17:26 | 3601905 bullionbaron
bullionbaron's picture

Such corrections have occurred during other bull markets (oil, nasdaq, etc), is it always the Fed?

Mon, 05/27/2013 - 17:28 | 3601914 LawsofPhysics
LawsofPhysics's picture

This all seems rather silly considering that a simple audit would answer the question.

Tue, 05/28/2013 - 00:36 | 3602766 JeffB
JeffB's picture

Especially given the fact that they really fight against it. ...

and when Germany asked for the gold they've been holding for them in "safekeeping", they promptly promised to do so... over 7 years time.


Mon, 05/27/2013 - 17:42 | 3601952 fonzannoon
fonzannoon's picture

That is the interesting part isn't it BOP? Sometimes I wonder if they get almost everyone in on the ponzi, then put a gun to their collective head....what everyone won't do to maintain that ponzi for another It is difficult to imagine the .01% of us who did it the right way overwhelming the system somehow. Even if we did it right. I am just holding out hope at this point.

Mon, 05/27/2013 - 17:26 | 3601906 LawsofPhysics
LawsofPhysics's picture

Then why not a simple and transparent audit of all the physical gold holdings?  Start with the treasury.  When there is a simple solution that authorities refuse to take, it's pretty clear what's going on.

Mon, 05/27/2013 - 17:49 | 3601972 el Gallinazo
el Gallinazo's picture

Good question, and here is the straight dope.  They refuse to audit Fort Knox to give our first year physics majors trying to wrap their heads around quantum mechanics a real life example of Schrödinger's Cat in extemis.

Mon, 05/27/2013 - 18:31 | 3602051 Money 4 Nothing
Money 4 Nothing's picture

Aahh. The age old question. " Does Ft. Knox hold any Gold"

The Gold they do hold is not of global trade quality. They weigh in at 22 lbs instead of 27 lbs and Bill Clinton knows the rest of the story. ;)

Is there Gold in Ft. Knox? Of course there is. Theres just none in the Fed! Teeheeheee! Ask Germany.

Okay.. seriously Ft. Knox Gold reserve is not of investment grade purity or weight.

Why do you think it's armed so heavily?  To make sure nobody finds the truth.

Their bars are like display racecars of NASCAR, body is there but the driveline is missing. What year we leave the gold standard? and who shipped our holdings to London as collateral would be more obvious question to ask.


Mon, 05/27/2013 - 19:20 | 3602147 filament
filament's picture

So, is it purer than when it comes out of the ground?

Mon, 05/27/2013 - 20:24 | 3602289 Money 4 Nothing
Money 4 Nothing's picture

Here is the full story.


There not .9999. It has a mix of "other" if you look into the Clinton connection. Which obviously you didn't.  Your answer is in that story. China gold shipment = tit in the wringer back in his day.


Mon, 05/27/2013 - 21:01 | 3602384 Herd Redirectio...
Herd Redirection Committee's picture

Any kid who has surfed the internet knows there isn't any gold in Ft Knox.  Why?  "Pics, or it didn't happen"

We all have friends who are more bark than bite.  You simply don't "take someone's word for it" in the 21st century.

I mean, there might be some gold there, but its not owned by the Federal Gov't!  There are probably between 10 to 100 claimants on each bar!

Mon, 05/27/2013 - 18:32 | 3602055 Antifederalist
Antifederalist's picture

Bingo. To think that it is all there and yet they will not audit it?

Give me a break.

Because we all know that governments are honest.

We should be storming the Bastille .

Mon, 05/27/2013 - 17:21 | 3601866 exartizo
exartizo's picture


surprised no one has called "bullshit" on this one yet Tyler(s).

ahem.... proof please of

1. The existence of such a gold cornering Eastern Consortium.

2. The cornering of the physical gold market.

3. A good explanation as to why this alleged Consortium has not acted yet to protect their interests in the face of falling Fiat Gold prices.

In the absence of any real evidence this entire rant is basically "inflammatory bullshit"

Mon, 05/27/2013 - 17:21 | 3601888 Ghordius
Ghordius's picture

you would have to ask the author, Alasdair Macleod of

Mon, 05/27/2013 - 17:46 | 3601965 Graabein
Graabein's picture

To me the idea that these exporters are offsetting foreign currency risk by accumulating gold is enlightening, logical, and fits the provable flow of physical from West to East. And the fact that Germany has to wait seven years to get a little part of their gold back seems to back the unprovable claim that Western central banks have litte to no old left. I struggle to see that this is a "rant" and "bullshit".
But hey, you're much smarter than me. I better run and sell my physical immediately.

Mon, 05/27/2013 - 18:08 | 3602014 tmosley
tmosley's picture

1 is a matter of public record.  The East is buying gold in huge quantities, and may be clandestinely buying even more than they are reporting.

2 is or will be revealed in rising premiums for physical.  The trend is "up" for that, though it isn't so high as to force idiot trolls (like you) to admit the truth yet.

3 is explained simply by the fact that eastern foreign reserves are still mostly paper (officially 98+%).  They want to convert paper to gold or other substantial assets.  If they can do it at low low prices, then all the better.

But I think you already knew all that and are just tilting at windmills trying to stop people from destroying the system your masters created.  Time to ditch the losers and come join the winning team, son.

Mon, 05/27/2013 - 18:42 | 3602071 Money 4 Nothing
Money 4 Nothing's picture

Fucked up part is China is using their bonds to pay for the barbaric metal. The Bernank buys or hides the bonds back from the purchace and round n round we go. They get to deleverage out of their bonds / dollar.

Fed Scratch out BOC and type in BOJ? Who knows, rumored China holds 700 tons of this worthless metal and Ruskies have even moar..

Dickhead has to buy them back and stuff them in a new york basemment never be seen again. Until the hurricane of course.

Hows that theory?

Mon, 05/27/2013 - 21:26 | 3602434 TuPhat
TuPhat's picture

exartizo, You must be new here at ZH.  Many, many articles have been posted over the years with a great deal of information on those three items you mentioned.  Of course you ask for proof.  What is proof on the internet?  Everything you read on the internet is absolutely true, right?  If you want proof, do your own homework.

Mon, 05/27/2013 - 17:54 | 3601983 I am Jobe
I am Jobe's picture


She should go back to doing what she does best, being a hooker.


Mon, 05/27/2013 - 18:00 | 3601989 Cacete de Ouro
Cacete de Ouro's picture

The only compelling evidence of central bank gold ownership or lack thereof would be Federal Reserve CBIAS Account lists, Bank of England custody lists and associated book entry transfers with the LBMA clearers, BIS gold deposit lists, comprehensive bullion bank hedge book details, and the breakdown of CB Balance sheet  categories for Gold (and Gold Receivables) into 'Gold' and 'Gold Receivables'...and the voluntary publication of the above is not going to happen....


There are other ways however......

Mon, 05/27/2013 - 18:01 | 3601999 americanspirit
americanspirit's picture

In many ways this historical sequence began with John Foster Dulles, whose role in WWII is almost universally unknown. He, along with many other Americans of wealthy backgrounds, were instrumental in the rise of the Nazi war machine - he served on the Board of Directors of IG Farben until at least 1943 ( records get hazy after that) and then post-WWII he was instrumental in getting as much Nazi gold - including the melted remains of Jewish teeth - out of Germany and into safe hiding. That gold was then used to finance the re-birth of German industry, in which of course many wealthy Americans had maintained a hidden ownership interest through the war and afterwards. Prescott Bush was one of these traitorous bastards, along with many other prominent American names. Fast forward to our first admitted criminal president Richard Nixon and everyone thinks they know the story of gold from that point until now. Except they don't. As Alasdair Macleod points out, there is substantial evidence that Western governments have looted the treasuries of their nations although he is too polite to put it in exactly those terms. Gordon Brown should of course be tried for treason, as should every American president from Ronald Reagan to Obama ( although Reagan is dead, and the Bushes, Clinton, and Obama are brain-dead, they should still be tried for treason), and the totally complicit financial community leadership of most Western nations ( dare I say the largely Jewish bankers?) should also be tried for treason. The people of the West have quite literally been sold down the Yellow river; the vaults are empty; and the Asians now own the world, but haven't chosen to let the world know it just yet.

It is coming.



Mon, 05/27/2013 - 18:01 | 3602003 Bloody Chiclitz
Bloody Chiclitz's picture

Suppositon based on rumors, prejudice and fear predominate here. They are the main component of the noise on this board.  Mostly it's entertaining in a way that appeals to an old guy with a little ADD.

There is some signal to be found here and while it is scarce it is also sometimes very high quality info and analysis.

So I'll keep reading.

Posters please keep the moronic repetition down.

I could use a lot less posts based around the idea that the international financial system as we have known it will cease by the end of the ______(day, week, month, current year). Further, since I have this pile of Polar bears, Kugerrands and silver coins me and mine will be living happily in our bunker. Meanwhile everyone who thinks a I'm a paranoid idiot will spend all day hunting for for out of date cans of cat food. Then that hot chick down the street will blow me for a box of mac and cheese.

I get it.

That's your plan.

You're a genius.

I'm in awe.















Mon, 05/27/2013 - 18:14 | 3602026 besnook
besnook's picture

and what is your interesting penny and a half(devaluation, you know). there is nothing yet.

you are correct in your analysis that there is a lot of superfluos stuff posted here. that is part of the entertainment. i am as guilty as the next guy. tyler has to make a living, however, so deal with it because ther are a lot of people here who know way more than you do about things in general and specific things that are pertinent to the meme and in general. suffering, as you seem to be, through the least of these comments is a source of important info regarding the zeitgeist of the moment for the somewhat radical crowd that gathers here.

so where is that penny and a half?

Mon, 05/27/2013 - 19:07 | 3602117 BeanusCountus
BeanusCountus's picture

Not planning on end of world anytime soon. Although that Mac and Cheese thing sounds interesting. But a lot of the "rumors and innuendo" that most on this site discuss are a product of a lot of conflicting information made public on a daily basis. And the powers that be are hardly forthcoming. Not much of a conspiracy theorist, but the government certainly releases bullshit info on a regular basis to be taken as fact. (Like Kennedy was shot from the rear. Sure, just watch the Zapruder film.) anyone that believes one word out of ANY government without verifying it is really the idiot. They may not lie all the time, but they certainly do some of the time. And people questioning their integrity on something as simple as gold, which they hold as an investment, is more than appropriate. Way too many inconsistencies in their stories. And then there is the simple fact that they could put it all to rest with a simple audit. Why wouldn't they do it? Oh yeah, they are probably just trying to save some taxpayer $$$. I mean, they are always saving taxpayer money when they get the chance. Haha.

Mon, 05/27/2013 - 21:07 | 3602398 Herd Redirectio...
Herd Redirection Committee's picture

I always thought the 'Grassy Knoll' idea was so ridiculous, so far fetched...  Of course, I had never seen the Zapruder film, or even known the slightest bit about the stretch of road where JFK was assassinated, let alone knew anything about geopolitics and finance.

Then, when I saw that the grassy knoll was literally head-on to where JFK was headed...  You realize its the easiest shot, and the easiest get away.

Mon, 05/27/2013 - 21:18 | 3602409 akak
akak's picture

I realized the absurdity of the "lone gunman theory" even as a young kid when watching the Zapruder film, and seeing pieces of Kennedy's skull and brains being blown backward by a bullet that .... supposedly also came from behind.

Sorry, but simple elementary physics refutes the idea of Oswald having been the lone assassin --- for every reaction, there is an equal and opposite reaction.  Please show me any instance in which fragments from a body being hit by a bullet fly back in the same direction from which the bullet came.

Tue, 05/28/2013 - 03:47 | 3602900 Diogenes
Diogenes's picture

Things didn't start to clear up for me until I had this thought. Don't look at the assassination, look at the coverup. Was there a coverup? Who was behind it? Who else was involved? How was it carried out?

When you look at the matter this way it soon becomes clear that yes, there was a coverup, who was involved, where it led, and you can trace things backward  to who benefitted and who was involved in the whole scheme.

This will give you a fresh slant and lead you to see things in a whole new light.

Mon, 05/27/2013 - 20:34 | 3602314 Jendrzejczyk
Jendrzejczyk's picture

Just over 8 weeks in and you're already bored with us? Sincere apologies, and we will try to be more












Mon, 05/27/2013 - 22:42 | 3602573 TheFourthStooge-ing
TheFourthStooge-ing's picture

inersesting (adj.): fraudulous supercific impulsionarity with proness to psychiastric monopolity and parallely strained logics.

See also: AnAnonymystical, citizenish, decivilizationistic

Tue, 05/28/2013 - 03:57 | 3602907 akak
akak's picture

The crustiness of your mattering things is definitely something.

Mon, 05/27/2013 - 22:12 | 3602511 Vooter
Vooter's picture


Mon, 05/27/2013 - 18:19 | 3602031 OutLookingIn
OutLookingIn's picture

Lets look at the facts, as reported by the Census Bureau concerning gold bullion exports 1991 to 2012.

Net gold exports 5,504 tonnes

Us mine supply and recycling 7,532 tonnes

Gold demand 6,517 tonnes

That leaves only 1,015 tonnes for export

Where did the other 4,489 tonnes come from?

Hint. It didn't come from 'Little Annie Fannie'!

Tue, 05/28/2013 - 00:52 | 3602782 Lord Koos
Lord Koos's picture

We are allowing China to catch up as far as gold reserves.  Either we allow them to acheive parity with the western world with the amount of gold they have, or there will be real wars, not "currency wars".  This equal sharing of physical gold necessitates that western standards of living go lower, while developing countries' rise higher.  The central bankers and the elite are trying to pull it off as smoothly as possible in order to avoid outright revolution and war.  The US still has plenty of physical gold in its possesion but it will no longer dominate, and why should it?

Tue, 05/28/2013 - 01:09 | 3602801 AE911Truth
AE911Truth's picture

Where did the other 4,489 tonnes come from?


There has been conjecture that gold stolen by Japan from China prior and during WWII is the source of the supply of gold coming onto the market. In 2012, GATA's Chris Powell discounted that possibility in his post, If U.S. had 'Yamashita's Gold', they'd put it in Cracker Jack boxes.

While I concur with Powell that if the US had access to such gold in 1968, they would have employed it to prevent the collapse of the London Gold Pool. It is my belief, however, that such gold did exist but, in 1968, "Yamashita's gold", i.e. China's stolen gold, was still a tightly held secret of the US government privy to only the top echelons of the CIA and a few others.

More importantly, however, in the 1960s China's stolen gold, i.e. 'Yamashita's gold', had not yet been laundered into the international banking system. The laundering of the illicit horde of gold was not to happen until the 1980s, the decade when, not coincidentally, American Barrick, a junior oil and gas producer, was to become Barrick Gold.

No less than the esteemed Professor Antal E. Fekete recognized the possibility of gold laundering by Barrick when he questioned Barrick's inexplicable and self-defeating strategy of unhedged forward selling of gold at prices far below the market.

In his August 2006 article, To Barrick Or To Be Barricked, That Is The Question, Professor Fekete suggested Barricks strategy could, in fact, be an operation to cover up the laundering of gold. The professor wrote:

Is Barrick a front to cover up gold laundering?

..unless Barrick was a front to cover up gold laundering by governments, in which case unilateral forward selling was not a mistake but a deliberate policy...The suspicion that Barrick is a front to cover up a gigantic gold-laundering operation, presumably on behalf of a government (or governments) that need more time to complete a gold acquisition program in the order of thousands of tons of gold, is hard to escape.

In my book, Light In A Dark Place, I quote from EP Heidner's Collateral Damagewhich confirms what Professor Fekete had surmised-but Barrick wasn't laundering gold to complete a gold acquisition program as believed by Professor Fekete-Barrick was, in fact, laundering China's stolen gold to bring it into the international banking system.

US Intelligence operations had been siphoning off the gold [China's stolen gold] for three decades. However in 1986 Vice President George Bush took over the gold from Marcos and the gold was removed to a series of banks, notably Citibank, Chase Manhattan, Hong Kong Shanghai Banking Corporation, UBS and Banker's Trust, and held in a depository in Kloten, Switzerland.

In 1992, George Bush [former Director of the CIA] served on the Advisory Board of Barrick Gold. The Barrick operation would create billions of dollars of paper gold by creating 'gold derivatives' ...[and] would become an investment for nearly every gold bullion bank associated with the Marcos gold recovery [China's stolen gold]. These banks would loan gold to Barrick, which would then sell the borrowed gold as derivatives, with the promise of replacing the borrowed gold with their gold mining operation.

Barrick, which has no mining operations in Europe, used two refineries in Switzerland: MKS Finance S.A. and Argor-Heraeus S.A. - both on the Italian border near Milan, a few hours away from the gold depository in Zurich...The question that Barrick and other banks needed to avoid answering is: what gold was Barrick refining in Switzerland, as they have no mines in that region?

Barrick would become a quiet gold-producing partner for a number of major banks, and its activities became subject to an FBI investigation into gold-price-fixing. The records on this investigation were kept in the FBI office on the 23rd floor of the North Tower, which was destroyed by bomb blasts shortly before the Tower collapsed.

p. 11, Collateral Damage: US Covert Operations and the Terrorist Attacks on September 11, 2001, EP Heidner (2008)

Mon, 05/27/2013 - 18:25 | 3602041 besnook
besnook's picture

so waht is china's play. gold is a great way to hedge its dollar and euro holdings but is there a greater purpose? do they intend to corner the market in the physical stuff so they alone can determine the price, a price that would be sufficient to back the yuan as the new reserve currency making the dollar a subservient currency as a matter of current accounts. the rest of their trade accounts can be easily balanced by gold value today. even the 110 bilion dollar deficit with japan is insignificant because the 300 billion dollar positive current account with the usa makes it possible.

if gold is raised to 5000 dollars/oz then china would be king of the world if the real gold holdings of the west were revealed and compared to china's holdings as a percentage of trade volume and current accounts. locally used currencies could still be issued as fiat and even valued locally as long as trade was settled in gold, kinda like bretton woods but with floating international currency values.

Tue, 05/28/2013 - 00:53 | 3602787 Lord Koos
Lord Koos's picture

I doubt China is going to be "king of the world"... despite speculation and conspiracy theories, China will always have a lot more people and less gold than the USA.

Tue, 05/28/2013 - 04:46 | 3602934 besnook
besnook's picture

the population makes a shorter hill to climb. per capita income doesn't matter as much as gdp. china only needs a quarter of the per capita income to match usa gdp. they have the advantage. it is just math.

Mon, 05/27/2013 - 18:32 | 3602054 Rimon
Rimon's picture

So with global reade rolling over and by default Asian surpluses going away, wouldn't that imply lower demand for gold by Asia central banks.. An of BOP surpluses turn into deficits, Asian central
Banks might end up selling gold to defend their currencies.

Mon, 05/27/2013 - 18:56 | 3602101 Bloody Chiclitz
Bloody Chiclitz's picture

" many ways this historical sequence began with John Foster Dulles, whose role in WWII is almost universally unknown. He, along with many other Americans of wealthy backgrounds, were instrumental in the rise of the Nazi war machine - he served on the Board of Directors of IG Farben until at least 1943"

Try 1934 not 1943.

I'm sorry, I misspoke before.

It's rumor, prejudice, fear, ignorance, libel and slander.

Slander both historical and current.

While it's true many people who post here know more than I do about some things many people who post here know a good deal less than I do about some things.

The least important comment on this board is not worth as much as a goose fart on a muggy day.

I'm always willing to learn but there are many column inches of complete blather. 

I will grant that time spent reading this stuff is worth at least twice as much as it costs.

Mon, 05/27/2013 - 21:25 | 3602430 americanspirit
americanspirit's picture

BC - it was 1943 and beyond - and you are clearly an idiot troll

Mon, 05/27/2013 - 22:13 | 3602512 chindit13
chindit13's picture

I think you are a Leo Kottke fan.  Leo Kottke fans understand.

Mon, 05/27/2013 - 19:08 | 3602120 Maestro Maestro
Maestro Maestro's picture



"Yes, of course gold is NOT money! The true and pure concept of money is basically credit..."As I wrote in Moneyness: 'Money is the referencing of the thing, not the thing itself. As FOA said, money is 'a value stored in your head!' Money is not something you save. 'Money in its purest form is a mental association of values in trade; a concept in memory not a real item…This is the money concept, my friends.'"




September 19, 2012 4:49 PM"


"Gold is money, everything else is credit."
--J.P. Morgan, 1912

Fiat is actually more honest than a gold standard."
--FOFOA, Thursday, July 28, 2011


Freegolders say they are AGAINST gold as money, that gold IS NOT money.


As per above, Freegold says that money is just something in your head and “NOT A REAL ITEM”!


Who is AGAINST gold or honest money?




Fregolders say that gold is neither commodity nor money.  What kind of bullshit is that?



Mon, 05/27/2013 - 21:11 | 3602402 Herd Redirectio...
Herd Redirection Committee's picture

They always did lose me in the lengthy lengthy obscure explanations (if you can't explain it to people, you don't understand it yourself).  The stance on silver was always the most entertaining part for me, though.

Mon, 05/27/2013 - 21:16 | 3602411 Zero-risk bias
Zero-risk bias's picture

Back to full circle 'intrinsic' oximoronic arguments. My two cents..

When discussing what things are and what they are not, circular debating tends to arise. Is a cat an animal? Do animals have legs? If something has four legs could it be considered a table of sorts? Can a table be living creature? It's interesting to consider how we use language and how we draw distinctions, but it doesn't alter the fundamental properties of the thing which is being discussed. It just makes it easier to put it in a box.

Considering what it is, has been, and likely to be..

It's a metal, not a base metal, although all metals on Earth are a finite resource. A metal is an element which cannot be synthisized but can be faked. It can be tested and verified, and it has been used both as a medium of exchange and a store of wealth over time, and it is widely considered to have intrinsic value due to both its physical properties, scarcity, and its aesthetic appeal. In the future, it's probably going to be valued, until the point when it is not worth anything to anybody, or nobody is around to value it.

But we all know this..

However,  the term 'money' and the forms money can take is where trickery and delusion lies. Today, with lack of a better store of value, it's dumb to descibe gold as a mere commodity, but to say it's not a commodity is a little dumber. Gold is a natural resource, which originally nobody owned, since which has been commidified, (bought, sold and hypothecated). Similarly, food, water, energy, time and information can also be considered a commodity. The idea of money itself is deception. Productivity and compensation (consumption) are the underlying fundamentals. Like many things, gold is a commodity, Cash is a scrip, that much is true.

Mon, 05/27/2013 - 21:37 | 3602452 MaxThrust
MaxThrust's picture

God is Math?

Yes, even I can accept that one.

Mon, 05/27/2013 - 21:44 | 3602460 Bloody Chiclitz
Bloody Chiclitz's picture

I've been posting here for short while reading here for a long time.

While neither an idiot or a troll I am bored with the discourse.

As they say at the ticket counter with an icey smile.

Have a nice day.

Mon, 05/27/2013 - 23:17 | 3602653 TheFourthStooge-ing
TheFourthStooge-ing's picture


Have a nice day.

You too, and don't forget to wipe your ass!

Mon, 05/27/2013 - 22:37 | 3602559 Ban KKiller
Ban KKiller's picture

Short time thinking succeeds at first but goes in a flash. Long term thinking is plodding, unexciting and persistent. Which country are you in? Oh, add a dash of corruption for the flavor and cede control to the bankers. Now where do you live? Modern slavery sure  is the fiat currency world of today. Gold...starts to climb in ten, nine, eight, seven...

Mon, 05/27/2013 - 22:43 | 3602577 chindit13
chindit13's picture

I'm going to sit down with a cup of morning coffee and try to understand the implications of having all the gold end up in China, India, Mongolia, Afghanistan and Sri Lanka.  Since I'm in Asia, I going to look out my window and see if they're walking a little taller and whistling a happier tune, because last check yesterday they were not. I'm going to run a few simple tests on my tap water to see how many ppm of stuff I'd rather not consume is in there, and if it is less than yesterday. I'm going to put on my John Lobbs and see if they get adulterated by what's in or not in the open sewers.  I'm going to check if all the IP on sale in the markets is domestically originated or pirated, whether it is movies or computer software (okay, lots of Amatabh Bachchan and Sanjay Dutt flicks for sale, but those are pirated, too.)  I'm going to do a random poll of citizens and ask them this question:  Airbus, Boeing or Ilyushin?  I'm going to call the mayor of Keokuk, Iowa and see if the Little League Baseball season has been cancelled due to lack of coins in all the local LCSs.

I can't help but have this sneaking suspicion that this shift of shiny elements, if it is even occuring, is not going to make a lick of difference in the ongoing rotation of the planet or the critical mass of intellect and innovation that has characterized the last 500 or so years of human existence. I can't help but think that those who let IT get away, if they indeed have done so, did so because they realized the proximity to IT or the possession of IT really did not materially effect the development of their economy or lifestyle, and that the historical chase for IT (as exemplified perfectly by the world's largest total holder, India) has been a Pyrrhic Victory at best. I'm also guessing that Afghanistan is not going to replace the US anytime soon as either the fountain of discovery and innovation, or even the principle market for mass produced Chinese consumer goods.  Exciting little country, to be sure, that Afghanistan, but hasn't made more than a self-inflicted impact on the world since the days of neighboring Gandhara.  Alas my dear MacLeod, I wonder if you are not trying to sell something, something which is already in abundance on the streets of my neighborhood, owing to its exalted status in the eyes of the local populace.

As I sip my coffee, I hear a Miles Davis track in the background. I check the sleeve.  "So What".  Nice music.

Tue, 05/28/2013 - 03:09 | 3602885 Hulk
Hulk's picture

Sneaky Bastards, they have Chindit13 trying to throw us off track !!!

Tue, 05/28/2013 - 04:01 | 3602905 Diogenes
Diogenes's picture

To paraphrase Adam (John Goodman) Smith ca. 1974: " Peasants have been hoarding silver and gold for centuries. And still  they remain peasants".

Tue, 05/28/2013 - 00:03 | 3602716 WTFUD
WTFUD's picture

Sometimes i wish there were some geologists on here to explain more eloquently than i.
Truth is there are several companies ( couple from uk ) that i have worked closely with in an independent capacity as recently as last year and they have raised £10's of millions ( rolling into a few hundred mill ) pursuing very low grade 1.5g/ton in difficult terrain (spread over large areas ) with almost zero infrastructure and with significant energy costs in africa.
One company is 9 generations (+250 years) in this business so i can conclude they must be expecting gold to rise significantly OR the investors gonna be mighty upset.
Yes i think they know a little bit more that the few desperate clutch at straws doubters at where this is going.
Advice: follow the gut instincts of the folks here on Z/H, put some effort in at establishing some facts AND invest what you can afford in gold and silver as soon as possible.

Tue, 05/28/2013 - 00:59 | 3602792 Dungeness
Dungeness's picture

I have been doing some thinking about that exact same thing.

If we transition into some type of global totalitarian currency, something like a global central bank version of bitcoin, could gold's value become worthless?

In other words, at some later date, what will I be able to exchange physical gold for? And at what exchange cost? And at what tax rate? And will it be legal to do so?

As one poster said earlier, perhaps the US trading all it's gold for the worlds most powerful military was a wise choice?

Along that same vein, perhaps selling gold for self sufficiency at the far reaches of the empire could be a wise choice as well? Something physical and real and useable day in and day out.

Or, just let whatever happens happen, enjoy life day by day. We all die. During my life review, I'll just smile and say it was one hell of a ride!

Tue, 05/28/2013 - 01:03 | 3602796 n0ne3
n0ne3's picture

unless you are in the 400 richest americans group isn't your wealth relatively insignificant? given the combined wealth of those top 400 indivinduals is more than the wealth of.....? the bottom 90%? if you are in the bottom 90% really, does your wealth, little as it is, really even register?

Tue, 05/28/2013 - 01:33 | 3602826 unwashedmass
unwashedmass's picture

bottomline, the Comex option expiry is tomorrow. 

which, since they don't seem to have the gold to deliver even at this price (since the peasants worldwide WEREN"T terrorized as anticipated and DID rush into capitalize on the engineered bargain rather than sell their gold)...........the Cartel will more than likely stage another operation...

given their level of contempt for the public at large and any market regulators and even for reality, this operation will more than likely follow the blatantly obvious pattern of all the others of the past "operations"

it will begin in approximately 39 minutes, or 2AM New York time when early trading begins in London --- starting with a bang, a blatant smash and grab....which, they will then try to push and push and push to generate a waterfall...

when this falls, they will dump in more contracts (this is a completely paper operation, no actual gold ever changes hands).....and engineer a completely false waterfall by simply taking out all bidders at every level......bidders, mind you, have to be the stupidest people on earth now because they are playing in an utterly corrupted false market where there is little to no hope of ever seeing they have to pray that the Comex doesn't completely melt down before they get a cash settlement.....

something that looks more unlikely with each passing day.

But let's not digress. If things are progressing satisfactorily, the Cartel will allow a slight leveling off as New York wakes up. Then, they will move in for the 8:3o smash at the opening of the Comex...

again, with the prayer that the peasantry will be frightened on their lips....

and hoping a flood of actual bullion will suddenly appear on their doorsteps....which it won't.....not with the Indians, the Chinese and the Russians outside the doors taking every ounce they can get their hands on.

and then, Bart Chilton will appear like a vision on Bloomberg and explain exactly how and why the four year long "investigation" into metals trading on the Comex needs more time......and what we can all see in front of our eyes on an almost daily basis now...

isn't actually happening. 


Tue, 05/28/2013 - 02:04 | 3602841 unwashedmass
unwashedmass's picture

Two oclock, the smash and grab should start any minute....

unless the Fed's buddies were late getting in from the Hamptons this long weekend......

that's one of the problems with the 1% Masters of the can't really rely on them in the clutch, 'Bennie......

Tue, 05/28/2013 - 02:08 | 3602843 unwashedmass
unwashedmass's picture

It should be noted, however, that Bloomberg can be counted on in the "reinforcing propaganda" arena....

they have been running the "Gold and Silver Drop" headline for the past two 5hours as gold has given up all of fifty cents, and silver hasn't budged..

So high fives to Mike for being one of Ben and Jamie's good soldiers!

Tue, 05/28/2013 - 03:59 | 3602909 Diogenes
Diogenes's picture

3:57 gold up $4 so far ( 20 minute delay price).

Tue, 05/28/2013 - 10:08 | 3603392 smacker
smacker's picture

- Central banks have sold all our gold.

- Central banks are destroying fiat currencies with QE & other devaluations.

- Central banks are manipulating gold markets to support the destroyed currencies.

What next?

- Asia demands payment for energy/goods exports in gold, not worthless USD/EUR?

The West hasn't got enough gold left to pay for Asian imports we buy.

Looks like a recipe for economic chaos to me...

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