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Guest Post: What Lies Ahead for Gold?

Tyler Durden's picture




 

Submitted by Jeff Clark via Casey Research,

First, the bad news…

The selling is likely not over. The capitulation process may not be completed. Overall momentum remains down.

How low can gold and silver go? One can view all sorts of chart patterns and technical signals, and while a few will eventually be correct at calling the bottom, we prefer not to base our decisions on this type of strategy, starting with the fact that there are many different interpretations and too much variance in the predictions. What we do know is that given that capitulation is under way, the selling will overshoot to the downside, just like surges can overshoot to the upside. Our response should be to prepare to take advantage of that situation.

Sentiment has shifted to negative. All the headlines and stories about gold are negative and bearish. It will take a while for these investors to reenter the market, especially those who just sold for a loss. This won't be a years-long process in the making, but it likely won't happen in a month, either. The implication here is that patience will be required on the part of committed precious-metals investors.

Now the good news…

We've seen this before. Remember the autumn of 2008, when gold fell 28%? In the spring of 2006, the price dropped 22%. And as we've pointed out before, many proclaimed in 1976 that gold was over when it fell a dramatic 47%.

None of these selloffs dictated the end of the gold bull market. That won't be the case this time around, either. A panicked shakeout is just that.

The fundamental case for gold is growing, not diminishing. In spite of the downtrend in the price, the conditions that support the long-term bull market are increasing in importance. The US and Japan alone will flood the world with almost $2 trillion over the next 12 months. Europe's problems have not been solved, and the Eurozone teeters on the edge of a recession. And did you know that not one G20 country currently has a balanced budget? The current fiscal and monetary path of many major countries remains unsustainable, and no amount of selling by traders and hedge fund managers has changed that.

One might argue that these issues now have a diminished effect on the gold market. Regardless of whether that's true, the effects of these actions have not played out. There is no easy way out of the corner our political leaders have painted themselves into. In other words, the damage has already been done to our fiscal and monetary state. The endgame to our debt situation hasn't changed. When the ramifications begin setting in, it will be imperative that we all have meaningful exposure to gold.

In the end, fundamentals always win. In spite of the selloff, the long-term trend is still intact. Keep your eye on the big picture.

A lifetime buying opportunity is shaping up. We're not exaggerating by stating that. Given the waterfall decline in both precious metals and equities, investors with the courage to act and the cash to deploy will not just be rewarded, but could very well change their financial futures. The chance for enormous gains will be remarkable.

As a result, some of you reading this will, frankly, get rich, especially those who have exposure to the best junior gold stocks. Sadly, not all will realize this level of profit; while there are a lot of reasons for that, the biggest is because they won't have the two Cs – cash and courage. I hope you will be among those in the first camp.

I'll leave you with a quote from one of the most successful fund managers in the US, which was made while gold was in the midst of its dramatic selloff. It captures exactly how we feel about the current situation – and I hope yours:

"You should love this if you're a long-term holder of gold, or a believer in gold as a currency – you can buy your insurance cheaper," said Mark Fisher, CEO of MBF Clearing Corp. "A long-term buying opportunity is near."

Recent market actions have left many staunch gold advocates uncertain about what's ahead... not to mention how to invest wisely for both the short and long term. What gold assets are the best to buy? Should investors be buying today or holding for further drops?

 

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Fri, 06/21/2013 - 14:56 | 3680145 unwashedmass
unwashedmass's picture

 

most of the risk is to the downside now. 

the commercials are long

the specs are short.

JPM has closed its gold and silver shorts --- and given that they own the CTFC, you can be absolutely sure they are never wrong. it simply isn't allowed. 

now, its a bear trap.... a mega bear trap designed by blythe for jamie....with love. 

Fri, 06/21/2013 - 14:59 | 3680163 SilverIsKing
SilverIsKing's picture

Are you 100% certain?

Fri, 06/21/2013 - 15:03 | 3680191 unwashedmass
unwashedmass's picture

 

actually. yes. the cost of production of both silver & gold is in reach now, and soon, since our fabulous leaders have sanctioned this manipulation and have sold massive quantities of the real thing.....they can't afford to start putting miners --- particularly US miners out of business......

cause guess what? the world knows that Ben and Jamie sold the gold........and they want to be made good on all that.....

just doesn't seem to be there in the basement of the Fed any more. 

now, where could that stuff have gone? 

Fri, 06/21/2013 - 15:06 | 3680203 bigdumbnugly
bigdumbnugly's picture
"What Lies Ahead for Gold?"

is this a play on words?

because i would guess more lies.

Fri, 06/21/2013 - 15:13 | 3680229 nope-1004
nope-1004's picture

What lies ahead for the truth, honest money, freedom of citizens, peace and civilitiy?

Nothing.  Which is the same for gold.  Nothing lies ahead, because gold itself IS all that is needed.  It's the fake monetary system surrounding it that is skewing perception.

Question should be:  What lies ahead for this failed, fake, and fraudulent financial system we have?

Gold is gold and needs no definiing.  This system, on the other hand, needs FED minutes, dog and pony show press conferences, BLS-BS, IRS swaps, derivatives, Michigan confidence, and all the other nonsense thrown at us to try to make it believable.

Gold is.

 

Fri, 06/21/2013 - 15:14 | 3680252 bigdumbnugly
bigdumbnugly's picture

thus my reasoning.

Fri, 06/21/2013 - 15:43 | 3680384 jbvtme
jbvtme's picture

the difference between then and now is the gold etf, GLD.  where folks can play a paper game.  am i wrong?

Fri, 06/21/2013 - 15:28 | 3680308 Silveramada
Silveramada's picture

So, price (paper)is collapsing, right? who is selling all the gold and silver (physical) then? Nobody

http://zysites.com/silververitas/

...except the US mint! 

Fri, 06/21/2013 - 18:12 | 3680535 Pegasus Muse
Pegasus Muse's picture

"A lifetime buying opportunity is shaping up."

Trouble is that a big price fall from here will likely result in significant shortages of physical.  You might not be able to find it at that "got to have it" reduced price. 

Here's a true story.  I tried buying in size from Tulving yesterday (6.20.13) but they would not quote me a "we buy" or "we sell" price.  Their reason --  Kitco was not quoting "buy" or "sell" prices on their website.  "The price is too volatile and we don't know what to buy and sell for", was what the Tulving guy said.  So I tried calling Kitco several times.  No answer -- all day long.  They pulled a "don't call us" on their customers. 

Next I checked out APMEX.  They had pretty good stockage of what I was looking for (Monster Boxes and one-ounce gold bars/coins) and they were selling at spot + their normal premium (which is higher than Tulving's). 

To make a long story short, I checked back with Tulving today.  They were back in business so I placed an order.

Could the prices decline from here?  Sure.  But I'd rather have a "bird in the hand" than have Bill Engvall send me one of his "Here's your sign" t-shirts.  http://www.youtube.com/watch?feature=player_detailpage&v=ZBjelRDKHUk#t=49s

====

Maguire - World Just Witnessed Massive Shift In Physical Gold 

Today whistleblower Andrew Maguire told King World News that the world has just witnessed a massive and irreversible shift in the global balance of physical gold.  Maguire, who recently appeared in the extraordinary CBC production titled, “The Secret World of Gold,” also spoke about the breathtaking gold and silver smash and what stunned investors around the world should expect next.  Below is a collection of what Maguire had to say to KWN in a mixture of communications since chaos erupted in key markets.

Maguire: “Just off wholesaler calls.  Most are too busy to talk at this time, but today (Thursday) will be the largest volume day this year and possibly 2 years.  Central bank purchases are almost certainly far in excess of paper sales.  We are so close to the marginal cost of production that my contacts are saying the gates are wide open here to purchase all physical that is available....

Continue reading the Andrew Maguire interview below...

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/21_Maguire_-_World_Just_Witnessed_Massive_Shift_In_Physical_Gold.html

 

Fri, 06/21/2013 - 18:00 | 3680791 DoChenRollingBearing
DoChenRollingBearing's picture

Silveramada wrote:

"who is selling all the gold and silver (physical) then?"

The gold mines are!

***

"The Malartic Gold Mine"

http://tinyurl.com/kyg4ovx

 

Fri, 06/21/2013 - 16:49 | 3680639 Kirk2NCC1701
Kirk2NCC1701's picture

"What lies ahead for gold owners?"  might be a better question.

A: golden opportunity for some, golden showers for others.

Fri, 06/21/2013 - 20:21 | 3681032 e_goldstein
e_goldstein's picture

I'd pay a 1/10th toz canadian maple to piss in Dimon's face.

Fri, 06/21/2013 - 15:10 | 3680226 jimmytorpedo
jimmytorpedo's picture

Just spent the average Americans annual salary on PM's.

Now I'm experiencing buyers remorse.

I wish I had bought more.

Fri, 06/21/2013 - 15:16 | 3680254 unwashedmass
unwashedmass's picture

JM Bullion still has some at reasonable premiums....slightly lower than APMEX>

Fri, 06/21/2013 - 15:12 | 3680237 ShrNfr
ShrNfr's picture

Cost of production is kinda meaningless at times. When gold is at 1800, the marginal mines with a cost of production come on line. When gold is at 1400, they go off line. A lot silver (and actually a fair amount of gold) is produced as a byproduct of copper mining. That supply is inelastic.

Fri, 06/21/2013 - 15:17 | 3680263 unwashedmass
unwashedmass's picture

my point precisely....they can't have people going off line now....not now that the world is starting to wake up to the massive theft and sale of the gold & silver "held in storage". 

this really is the crime of the past two centuries. 

Fri, 06/21/2013 - 15:29 | 3680310 Levadiakos
Levadiakos's picture

Yeah! Dat Stalling was nuttin

Fri, 06/21/2013 - 15:19 | 3680274 James_Cole
James_Cole's picture

The first person on here other than me I've heard point out this obvious fact. Silver is almost free up to a certain supply and most silver demand is industrial and can't be compared to the investment side of the market. But people on here refuse to acknowledge that...

Fri, 06/21/2013 - 15:40 | 3680366 Bay of Pigs
Bay of Pigs's picture

"Silver is almost free"

No, there was a former poster here who used to say that and his name was Math Man. He said, "It only costs $5 bucks to dig it out of the ground".

You are getting close to him as far as ignorance and stupidity go concerning silver production.

Fri, 06/21/2013 - 15:48 | 3680405 Levadiakos
Levadiakos's picture

You're acting like a bag holder

Fri, 06/21/2013 - 16:08 | 3680487 Bay of Pigs
Bay of Pigs's picture

LOL, having purchased my silver some fifteen years ago, I'm really shitting my pants.

Interesting how all the old trolls and PM bears are now back at ZH taunting everyone again.

Fri, 06/21/2013 - 16:11 | 3680499 Levadiakos
Levadiakos's picture

How's turd and mosley? They lost their ball sacks just like you

Fri, 06/21/2013 - 16:32 | 3680582 RockyRacoon
RockyRacoon's picture

You have trouble reading?  He said he bought 15 years ago -- as did I.  Our basis is MUCH lower than silver will probably be in our lifetimes, barring a meteor or global volcanic eruption.  How's about 100 oz bars for under $650.

Dumbass.

Fri, 06/21/2013 - 16:36 | 3680598 Pancho Villa
Pancho Villa's picture

I think the return of the anti-PM trolls to ZH is a hopeful sign. The old ones like JB and Mathman pretty much went away in 2011.

Fri, 06/21/2013 - 16:46 | 3680630 oddjob
oddjob's picture

Hell, I have a sealed monster box i paid 40.68 per/oz, never checked whats inside, not to worried about it.

Sat, 06/22/2013 - 09:22 | 3681737 chindit13
chindit13's picture

This sort of comment always surprises me.  Then again, maybe it doesn't.  There is this oft neglected term called "marked-to-market".  Apparently it is an affront to all that is decent and wholesome if banks do not do it, but just plain smart if holders of some other asset don't do it.

The only entity truly concerned with where someone bought something is the IRS.  For everyone else it's just an ego salve.

People here laugh at APPL holders who held from $705, even if the holder acquired his APPL at the 1980s IPO, but Ag holders who have sat and watched an almost 60% drop in the value of silver are "okay, because they bought 15 years ago".

Reminds me of the Yasumitsu Shigeta, the founder of Hikari Tsushin.  During the Dotcom bubble his stock went from about 2 yen to 241000 yen (IIRC).  His net worth went from about fifty bucks to $45 billion dollars.  He was then one of the Top Five richest people on the planet.  An elaborate strategy was presented to him that would have allowed him to lock in a substantial portion of that wealth (he had a lock on a lot of the shares, so could not sell, but there was an alternative that could have let him keep at least a third of that peak net worth).  He refused.  The stock tumbled to about 600 yen.

He's "okay", though, because as a founder, his acquisition cost (after intial IPO sales) was $0.  I guess the Pets.com founders are also okay, because their DCA was $0, so they are still at break even. And UST holders who bought the then-benchmark 30-yr in 1984 are still good despite the recent rate back-up.

Mark-to-market isn't just for banks.  If wealth preservation, rather than becoming a mere collector, is a goal, an asset holder should ask himself every day:  do I still like this asset at this price?  The market, as well as one's personal wealth, don't care where one bought.  That's only for ego (or, as noted, the IRS).

Here's a "purely hypothetical" additional example.  Let's say I bought gold in 1999 for a DCA of $283/oz and silver in the mid 1990s at just under $5.  Let's say I sold the first at a DCA of a shade above $1700, and the silver about $38.  Of course there would have been a touch of seller's remorse when Au then went above $1900 and Ag above $48, but what the heck.  Looks okay now.  Apparently, though, those who bought below my "hypothetical" DCA of $283 and $5, but who still hold both, are better off than me.  Should I feel hypothetically bad?

My "mistake" was that I ask every day, "do I like this asset at this price?"

A paper gain is a paper gain, but a paper loss is real money.  Anyone who has held from $48.50 has lost the same amount of potential wealth per ounce as the poor guy who paid top tick. Some people just find a way to rationalize.  Whether it's "money" or not, a holder can exchange for less goods or services than he/she could have exchanged it for two years ago.  The term for that is loss of wealth.  If the metal is intended for indefinite retention, then it is merely a collectible, like a Beanie Baby, so neither daily price moves nor articles about price moves should elicit any comments.

By the way (this is to answer another poster, but I'll toss it in here), physical bid-ask equals paper bid-ask, unless one is helping the LCS or online retailer cover their nut.  There is so much BS spewing from the promoters in their ads, on their sites, and in their articles.  This Casey Group is the ultimate shill.  The sell fear, and always have.  Invariably they turn out wrong, but I doubt they care.  They write books and give lectures, cash-in in the here and now, and probably don't care when five years from now their books get plopped on to the Steal Me Table just outside the doors of Borders and Barnes and Noble.

Sat, 06/22/2013 - 10:17 | 3681811 FreeNewEnergy
FreeNewEnergy's picture

chindit, I agree with much of what you say, especially that Doug Casey and his gang should have gone into politics because they are such magnificent panders.

One thing to consider, gold and silver have declined recently in terms of dollars - and almost every other currency - so, theoretically, one should be able to buy more of "something" with the increased buying power of the dollar if one converts gold or silver into fiat.

That's theory, not always practicable.

OTOH, everything is fungible and speculative today. Many metals holders think in terms of ounces, not dollars or yen or euros, so, they have what they have and await the eventual deconstruction of the fiat pyramid. Time. It's either an ally or a foe, depending on your particular horizon.

Sat, 06/22/2013 - 16:50 | 3682370 RockyRacoon
RockyRacoon's picture

Love ya, man.  Your example of dollar cost averaging is that of a holder of stock.  It just ain't the same.

When the Weltanschauung is gold as money, then the analogy falls apart.

Fri, 06/21/2013 - 19:38 | 3680925 Vooter
Vooter's picture

How's being last in the European civilization standings?

Fri, 06/21/2013 - 20:37 | 3681012 GoinFawr
GoinFawr's picture

"How's turd and mosley? They lost their ball sacks just like you"

Levadiakos

Last August 5 2012 wrote:

"Gold is a serial loser. If you own gold it is a serial killer "

"The crackerjack gold doomers only buy."

August 5 ,2012 Au @ ~1600US bitzn'bytes,

followed almost immediately by a ~12.5% rally (not to mention the gains some of the miners had).

Nice timing: Your raisins got yanked off like a paper towel on that one.

Fri, 06/21/2013 - 16:09 | 3680492 oddjob
oddjob's picture

Considering your 'handle' is a reference to a group of greek men that enjoy showering together, your attempted insult carries very little weight.

Fri, 06/21/2013 - 16:11 | 3680502 Levadiakos
Levadiakos's picture

It's a soccer team you household servant

Fri, 06/21/2013 - 16:15 | 3680511 Bay of Pigs
Bay of Pigs's picture

You smell bad. Go take that shower.

Fri, 06/21/2013 - 16:15 | 3680521 oddjob
oddjob's picture

I know. They usually forfeit games by halftime in a rush to get to the showers.

Fri, 06/21/2013 - 18:41 | 3680848 mqg25
mqg25's picture

I bet your Greek soccer "soap rangers" would gladly take silver over euros.

From what I hear now the most popular Greek sport is dumpster diving. Maybe now you can finally achieve your lifelong dream of becoming a real sports hero.

Fri, 06/21/2013 - 19:00 | 3680876 Gandalf6900
Gandalf6900's picture

You are either in your pre teens or ridiculously:

1. Not very smart

2. Not very clever

3. Not very sharp

...Correct answer shall follow

Fri, 06/21/2013 - 19:37 | 3680919 Vooter
Vooter's picture

Uh oh, look out...it's a SOCCER TEAM!

Fri, 06/21/2013 - 20:25 | 3681042 e_goldstein
e_goldstein's picture

Isn't that European for serial sheep gang-rapists?

Fri, 06/21/2013 - 15:49 | 3680412 nope-1004
nope-1004's picture

LOL.... "most of silvers demand is industrial".

James, you're either a complete idiot, or clever - because silver rounds sold for coinage are not counted in the calculation toward what is industrial use.  So you're right about the details but wrong about the metal as a whole.

 

Fri, 06/21/2013 - 16:13 | 3680509 James_Cole
James_Cole's picture

"Silver is almost free"

No, there was a former poster here who used to say that and his name was Math Man. He said, "It only costs $5 bucks to dig it out of the ground".

The basics:

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

The principal sources of silver are copper, copper-nickelgoldlead, and lead-zinc ores obtained from Canada, (such as Cobalt, Ontario); Mexico (such as Batopilas); PolandPeruBoliviaAustralia; and the United States.

https://en.wikipedia.org/wiki/Copper_extraction_techniques

Because a large portion of copper sulfide ore bodies contain silver or gold in appreciable amounts, a credit can be paid to the miner for these metals if their concentration within the concentrate is above a certain amount. Usually the refiner or smelter charges the miner a fee based on the concentration; a typical contract will say a credit is due for every ounce of the metal in concentrate above a certain concentration; below that, if it is recovered, the smelter will keep the metal and sell it to defray costs.

Fri, 06/21/2013 - 16:14 | 3680514 Bay of Pigs
Bay of Pigs's picture

Gee thanks Wally...

Fri, 06/21/2013 - 16:20 | 3680533 James_Cole
James_Cole's picture

So you understand? They get the silver no matter what, whether they want it or not. Hence why it's "almost free"

Either the Miner keeps it or if they're sending to a smelter the smelter either keeps it or charges a credit, therefore zero sum cost.  

Fri, 06/21/2013 - 16:35 | 3680595 RockyRacoon
RockyRacoon's picture

Well.  That explains why they are giving the stuff away.

Fri, 06/21/2013 - 16:47 | 3680634 Bay of Pigs
Bay of Pigs's picture

Rocky, the people in my neighborhood are all throwing silver from their rooftops screaming at the top of their lungs. 

They are gouging out their eyeballs too.

Fri, 06/21/2013 - 16:53 | 3680647 Think for yourself
Think for yourself's picture

Oh, I see. Since silver often comes along piggybacking on the mining of other ores, that fraction of the income is not considered in the financial analysis. It doesn't matter if the geological assays identified the presence of silver, they just go, "Hey, Silver! Bonus!"

Similarly, when budgeting for paying back a loan, I don't take interest into account, cuz that's just something which comes along.

Fri, 06/21/2013 - 17:24 | 3680720 James_Cole
James_Cole's picture

The point I was responding to, way up the thread, was about silver production costs. There's a lot of claims of production costs being as high as ~$30 and therefore silver must stay above x spot price. I regularly point out this is absurd, silver spot price could go to $0 and silver would still be produced. 

Of course it often factors into financial statements / analysis of a project (so does moly, Au etc.) but generally as - yes - a bonus. When you melt a tonne of rock depending on what it is you're going to get a bunch of things, silver you'll always recover it if it's mixed with Cu. But not in the kinds of quantities where it will compare to the Cu being extracted, so cost analysis always reflects the Cu in a copper ore project (duh). 

Disagree? Give me an example of a copper project where this is not the case, i.e. silver byproduct is used as a major component for project cost analysis. There are lots of examples where silver isn't even included. 

Fri, 06/21/2013 - 17:43 | 3680766 Bay of Pigs
Bay of Pigs's picture

You need to read a lot more and talk way less.

Here, try this,

http://www.silverdoctors.com/silver-price-to-rise-as-top-miners-production-evaporates/

Fri, 06/21/2013 - 18:28 | 3680832 James_Cole
James_Cole's picture

SRS Rocco is a clown who has changed his theories every couple years totally contradicting earlier claims. I've brought it up to him on here before and he's never responded. Anyway... 

So his example here is of a primary silver producer and he's trying to make the claim that a declining yield at Fresnillo is some broad-based indicator of silver production costs. 

What we are witnessing here is the evaporation of high-grade silver production only to be replaced by a much more expensive low yielding supply. 

As spot price goes up, grade goes down - not rocket science (the exception is when including non-primary silver producers / spot becomes irrelevant). But looking at primary silver producers is misleading...

>> Primary silver mine supply grew by 1 percent to account for 28 percent of global silver mine output. <<

>> Primary silver mine cash costs rose to $8.88 an ounce, reflecting higher prices for labor, electricity, and maintenance charges.<<

http://www.silverinstitute.org/site/supply-demand/silver-production/

Fri, 06/21/2013 - 18:32 | 3680837 fonzannoon
fonzannoon's picture

James if the dollar were to begin to decline in a big way, would the price of silver go up? I mean like a monster drop in the dollar's value.

Fri, 06/21/2013 - 20:41 | 3681096 James_Cole
James_Cole's picture

Logic dictates relative to dollar value yes. If people were to return to pms in a big way you'd see the relative value sky rocket, in USD or anything else. I don't disagree with any of that, though I think there's a lot of things to take into consideration. 

I like the Keynes quote and employ it often now - keep in mind markets can stay irrational longer than you can stay solvent. 

Fri, 06/21/2013 - 22:48 | 3681339 Vooter
Vooter's picture

Yeah, but can they stay irrational longer than I can stay irrational?

Fri, 06/21/2013 - 21:42 | 3681245 centipede
centipede's picture

You do not seem to understand what silver mine cash cost is. There are other expenses a silver mine company has to pay and overall silver production cost is much higher. Read this:

http://srsroccoreport.com/silver-costs-much-higher-than-most-realize/sil...


Fri, 06/21/2013 - 23:33 | 3681400 James_Cole
James_Cole's picture

Even though the folks (GFMS, Reuters) who publish the World Silver Survey do a good job calculating the cash cost for the primary silver mining industry, we will find out how useless it can be in determining the profitability of a mining company.

Um yea, OBVIOUSLY.

Out of curiosity I looked this up to see what Rocco is on about, as usual - nothing. First, you need to understand I'm not talking about primary silver producers anyway because their costs can be wildly inflated. But anyway let's look at this little junior he picks out..

The total difference between the two periods is $7,149,000. 

Their exploration costs went up in the period 2013 $2,759,000

They produced 302,466 Oz @ 27.60 compared to 402,096 @ 33.90

For a difference off $5,282,992

That's a pretty gigantic hole to fill! Between exploration and silver costs they're already down ~$8M. 

Let's imagine their production stayed the same, and they had produced an equal amount of silver (402 koz) they would've been down roughly $2.5M rather than $5.2M, which is not great, but it's also not the difference maker here.

Also, I like in their financials that their "other" category is $2M with no explanation, their corporate admin is nearly $2M as well, so between those two you've covered nearly 40% of revenue lol 

Miners are not known for their prudent fiscal policies..

Quickly checking over their site it also looks like their mine is winding down and they're desperately searching for prospects nearby (hence the increased exploration costs). So it's not a surprise that their grades are trending down. 

http://www.excellonresources.com/i/pdf/news/2013-05-01_NR.pdf

Imagine how well companies like this will be doing with silver hanging around the low 20s? And people say buy juniors! 

Sat, 06/22/2013 - 01:26 | 3681493 centipede
centipede's picture

I thought one of your points was, that cash cost of primary silver producers is low in comparison to the price of silver, or am I wrong? So I was trying to show you that the cash cost isn't all they have to finance. Somebody has to pay to find the silver - for the exploration, which can be a huge cost as you can see. Only that was roughly the same amount per ounce as the cash cost in the last year. And there are other expenses. Do you think they will sell for less than what the total cost is? For how long?

Your other point, that silver as a byproduct is cheap is a bit harder to refute, but if all those primary producers (28%) go out of business can the remaining supply meet the demand?

Sat, 06/22/2013 - 03:12 | 3681535 James_Cole
James_Cole's picture

I thought one of your points was, that cash cost of primary silver producers is low in comparison to the price of silver, or am I wrong? 

No, that wasn't my point. Cash costs for the Silver Miners can be all over the map. This is why (if you're investing in juniors) it's important to really understand what they're up to or have inside info. Rocco is right that on the surface different companies may look like they have similar costs when in reality they don't or claim much better costs than is true, but that's a separate issue. 

Do you think they will sell for less than what the total cost is? For how long? 

No, they'll go out of business. 

Your other point, that silver as a byproduct is cheap is a bit harder to refute, but if all those primary producers (28%) go out of business can the remaining supply meet the demand?

The 28% from all silver miners is misleading because only a few mines really make up that statistic. So if the bulk of silver producers go out of business it's irrelevant, you only need to look at the top five really.

Anyway, should be obvious but I've not been bullish on demand lately. 

http://www.silverinstitute.org/site/wp-content/uploads/2013/04/SilverDem...

Total silver fabrication demand in 2012 dipped to 846.8 Moz, reflecting losses in key areas.  Industrial silver fabrication slipped by 4 percent to 465.9 Moz, the result of the challenging economic environment seen in many industrialized countries.  However, India recorded a 4 percent gain while China experienced a small increase in industrial demand.

http://www.silverinstitute.org/site/supply-demand/silver-demand/

Fri, 06/21/2013 - 17:44 | 3680770 Panafrican Funk...
Panafrican Funktron Robot's picture

Dear James,

Who's digging out copper at these prices?

Fri, 06/21/2013 - 20:27 | 3681051 e_goldstein
e_goldstein's picture

Right, because there aren't any huge capital or labor costs in mining; the owners just stand in a hole and wait for the stuff to fall on them :-/

Fri, 06/21/2013 - 15:47 | 3680400 constantine
constantine's picture

Base metal secondary silver supply is likely to decrease with the crash in demand for base metals. Everybody on here knows about this dynamic; this is probably why they don't bother to acknowledge it in their posts.

Fri, 06/21/2013 - 16:15 | 3680520 James_Cole
James_Cole's picture

Base metal secondary silver supply is likely to decrease with the crash in demand for base metals

Uh.....

Fri, 06/21/2013 - 17:45 | 3680772 Panafrican Funk...
Panafrican Funktron Robot's picture

Copper rehypothecation.

Fri, 06/21/2013 - 15:49 | 3680408 BigJim
BigJim's picture

 Silver is almost free up to a certain supply

A 'certain' supply, huh? Gee, what a fount of useful knowledge you are.

Fri, 06/21/2013 - 16:08 | 3680486 jomama
jomama's picture

rofl. almost free?  where the fuck did you pull that one from?

Fri, 06/21/2013 - 16:33 | 3680586 Toolshed
Toolshed's picture

Too bad about that huge glut of copper already out of the ground though huh?

Fri, 06/21/2013 - 18:07 | 3680805 papaclop
papaclop's picture

Prescient call, Unwashed, I just read on a GATA release that Golden Minerals mining in Golden Colorado is closing up shop and laying off 470 employees due to the low metal prices.  It costs them $1600/oz to mine the gold, and the silver was also too expensive to mine at these prices.

The thing is, the Emperor is wearing no clothes.  All this new paper money out there is bogus.  It amazes me how few people have figured this out.  With metals this cheap right now, mortgage your grandmother if you have to, they will definitely be going way higher.  There's too much new money for them not too.

 

Fri, 06/21/2013 - 20:30 | 3681061 e_goldstein
e_goldstein's picture

I'm thinking that is one of the intended consequences of the pm ass raping this year-- shutting down the mines.

Fri, 06/21/2013 - 15:06 | 3680202 James_Cole
James_Cole's picture

If this guy had a shred of honesty he'd say "First the bad news... We've been steering you wrong all year so far posting nonsense frequently on zh..."

Instead they deliver some comically contradictory advice:

"First, the bad news…

The selling is likely not over. The capitulation process may not be completed. Overall momentum remains down.

....

As a result, some of you reading this will, frankly, get rich, especially those who have exposure to the best junior gold stocks." 

Love the sales pitch that includes "you will be RICH" lol

Based on these guys' terrible advice you sure as hell ain't gunna get rich listening to them!

Fri, 06/21/2013 - 16:36 | 3680599 RockyRacoon
RockyRacoon's picture

The copulation process may not be completed.

There... fixed.

Fri, 06/21/2013 - 15:35 | 3680340 spankthebernank
spankthebernank's picture

More lies.

 

Fri, 06/21/2013 - 17:59 | 3680788 Zero Govt
Zero Govt's picture

talking of lies where are the TF Metal Report Turdites, Sinclair snoozers, Silver Doctor nurses and King World News cretins when you need them????

They've been singing how the junior miners are undervalued for 6 months... no 1 year ...nae, 2 years ...as the price has been tanking

we are due a clear-out in Gold and Silver ...let's brush all the garbage away shall we

Fri, 06/21/2013 - 15:02 | 3680187 A. Magnus
A. Magnus's picture

They only have major downside risk if they can manage to keep crashing China's financial system so that the PBOC can't load up on physical during the next naked short smackdown...I doubt the ChiComs will allow themselves to be caught with their pants down again anytime soon...

Fri, 06/21/2013 - 15:12 | 3680231 unwashedmass
unwashedmass's picture

 

maybe the Bank of China can't keep buying if the banks are crashing there....

but the Chinese people most certainly can....

and excuse me, I don't suffer mass media brainwipe like most, seems to me I recall the Chinese government STRONGLY ENCOURAGING its citizens to buy gold and silver. ...

in fact their government was running ad campaigns.

that over 1 billion people....not in a paper-induced coma ... who believe that gold is money........

so, nice try, no cigar. 

Fri, 06/21/2013 - 15:13 | 3680243 unwashedmass
unwashedmass's picture

 

should add....the Chinese also learn math and accounting. the reall thing....

not like our students......

laughing. 

hard to hoodwink those who can see right thru the BS. 

Fri, 06/21/2013 - 15:36 | 3680342 cynicalskeptic
cynicalskeptic's picture

Is that why fraud is endemic with Chinese companies? they know how to cook the books better than their western counterparts?  I think not.

Perhaps that is one of the reason the 'common' folk focus on hard assets.  They don't trust anything else.

Fri, 06/21/2013 - 15:47 | 3680324 Smiddywesson
Smiddywesson's picture

The market is manipulated.  Ben laughs at your COT report.  People are getting killed trading with this "data."  Who knows, you may be right that it's a bear trap, but I wouldn't put too much faith on any "data" these days.  The system is rotten from the uppermost branches to the roots of the tree.

Fri, 06/21/2013 - 19:42 | 3680934 enloe creek
enloe creek's picture

i don't give a rat fuck shit about trading, gold was heading higher before QE when liquidity dried up back in 2007 gold suffered and rebounded first as a safe haven. id that over now? I don't feel safe with bonds and stocks or currency. as the deflationary pressure grows it will trigger more selling until someone defaults or a fund goes under, remember the fund that almost broke the buck? that was fear in the world financial system, it is going to happen again and there willl be hell to pay before they can print enough money then gold will be the asset of choice IMO. 2014 is the year it all gos down.

Sat, 06/22/2013 - 02:27 | 3681521 Newager23
Newager23's picture

 

 

The HUI is down 63% from the high in 2011 (628 to 230), this is nearly the same as the crash in 2008 (450 to 169 = 62%).  For the HUI to drop to 200, would be a 68% drop. That seems improbable to me, after all this is the index for MAJORS! Thus, my guess is the bottom is very soon or might have been 230.

It is probably a good time to start looking at stocks that have crashed. Here is a list of few that look pretty tempting:

Allied Nevada

First Majestic

Great Panther

Brigus Gold

Lake Shore Gold

GDXJ

Guyana Goldfields

San Gold

SIL

Richmont Mines

St Andrew Goldfields

www.goldsilverdata.com (for mining stocks)

Fri, 06/21/2013 - 15:00 | 3680159 Jonas Parker
Jonas Parker's picture

BTFD!

Fri, 06/21/2013 - 15:49 | 3680410 Levadiakos
Levadiakos's picture

Maria is drunk

Fri, 06/21/2013 - 14:59 | 3680167 Dr. Engali
Dr. Engali's picture

Buy today, buy tomorrow it will make little difference 10 years from now. I buy whenever I have the extra fiat to put away, and I keep some on the side just in case we get that big swoosh. Although odds are that it won't be available when it does.

Fri, 06/21/2013 - 15:50 | 3680414 Levadiakos
Levadiakos's picture

Hello old bags! I remember you backing up the truck on silver at $50

Fri, 06/21/2013 - 17:07 | 3680689 Think for yourself
Think for yourself's picture

Hello Dollar-Cost Averaging! Or, even better, discernment-weighed dollar-cost averging. I bought my first silver at $40, just a few ounces of it. Was on they way up and wanted to be sure.

On the way down, I saw an opportunity and "backed up the truck". Put in twice as much money down and, since price was at 30, I got nealry 3 times as many ounces out of it.

And now, with the price at 20, if I could find anyone who actually wants to sell physical, I'd be comfy to put twice as much fiat into it again...

In the long run, these few ounces at the top don't matter. The rest more than makes up for it.

You, however, sound butthurt. Like you followed the herd, got burned at 50 and scared off PM's. And now that you want to get back in you bitfh cuz you can't find a physical seller.

Fri, 06/21/2013 - 17:13 | 3680702 greatbeard
greatbeard's picture

>> I remember you backing up the truck on silver at $50

Considering silver never reached $50, I'd say this post has as much credibility as the rest of your tripe.  $48.58 appears to have been the high and that was only for the briefest of moments.  The odds of you "remembering" anyone "backing up the truck" at that moment are pretty slim.  Why don't you just crawl back under your rock?

Sat, 06/22/2013 - 07:15 | 3681630 Cobra
Cobra's picture

Since you're forcing your opinions on us, what investments would you suggest?

Fri, 06/21/2013 - 15:00 | 3680171 XenoFrog
XenoFrog's picture

Even as a devoted silverbug this article read like something from e back of an investment magazine. Somewhere between the timeshares in beautiful Haiti and the x-ray specs.

Fri, 06/21/2013 - 15:30 | 3680313 kito
kito's picture

not haiti but ARGENTINA!!! ITS UTOPIA....JUST IGNORE THE GOVT TANKS ROLLING UP TO YOUR NEW COMMUNITY looking for any "investment" that isnt in pesos!!!...............

Fri, 06/21/2013 - 15:40 | 3680364 Pool Shark
Pool Shark's picture

 

 

Simon? Simon Black?  Is that you?...

 

 

Fri, 06/21/2013 - 15:46 | 3680394 kito
kito's picture

naa man, simon is chile, casey has his own bugout utopian paradise in bumfuck argentina....where you also pay 10X what locals pay for the same plot.................

Fri, 06/21/2013 - 15:00 | 3680176 smlbizman
smlbizman's picture

the score is about 3,500 to 1...ill stick with the 1 winner that is the 5,000 year champ

Fri, 06/21/2013 - 15:02 | 3680179 Soda Popinski
Soda Popinski's picture

Gold and silver to zero.  The Bernank has convinced people it is less valuable than the toilet paper he prints every day.  POMO for life!

Fri, 06/21/2013 - 15:15 | 3680250 unwashedmass
unwashedmass's picture

ah, yes, the American-centric view of the world. how quaint. 

you do realize that gold sells around the world......and most are not quite as stupid as Americans now need them to be.....

Fri, 06/21/2013 - 15:02 | 3680181 Strawboss
Strawboss's picture

I dont normally post on ZH but enjoy the content and some of the comments...I usually hang out over at Turd's site.

I know that many are weary from the tremendous losses they have suffered from their convictions of gold/silver going to the moon and overloading themselves with gold/silver/miners, etc... waiting for the big payoff.

Now they sit on big losses and are resigned to a strategy of faith and hope.  If this describes you – read on…

Faith and Hope are pillars of the Christian faith (with love being the 3rd and most important) but I don’t know of any investing methodology that incorporates faith and hope as part of the strategy.  I would argue that if you are in a position where you are dependent on faith and hope – you have a very flawed investing methodology and really need to reconsider.  There is that old adage – “If you find yourself in a hole – the first thing to do is quit digging”.

Now – I am also a big proponent of keeping a certain amount of your net worth in physical metals – heck , I would suggest an allocation a bit higher than Turd suggests (I would suggest 25%). 

These markets are designed to be traded – NOT buy and hold (except for your 25% physical holdings).  Surely you know by now that a buy and hold strategy in anything PM related hasn’t been very effective (unless you got in early).  The past few years have been downright brutal – right?

I am trying to show you a way to trade that is easy to do – doesn’t require large amounts of capital to implement and only requires a normal account (so you can buy/sell ETFs).  Nothing more is required.

I believe I can help you dig out of the hole you have found yourself in.  Is it a guaranteed thing?  Of course not as none of us knows what the future holds.

All the details are posted on this thread.  If digging out of the hole you are in is important to you – I promise you it’s worth at least exploring.

Depending on your circumstances – I would suggest considering using 5-10% of your account balance to trying what I am doing.  Dip your toe in the water.  If it continues to work – perhaps dip a bit more.

http://www.tfmetalsreport.com/forum/4560/agq-trading-system

Here is a listing of every trade since March 12th (about 3 months ago).  As of yesterdays close – those trades are up 57%.

Trades:

Long AGQ on 3/12/2013 at $40.02.
Short AGQ on 3/13/2013 at $39.29. Gain/Loss on previous trade: -1.82% Cumulative Gain/Loss: -1.82%
Long AGQ on 3/18/2013 at $39.28. Gain/Loss on previous trade: .03% Cumulative Gain/Loss: -1.79%
Short AGQ on 3/22/2013 at $38.68 Gain/Loss on previous trade: -1.53% Cumulative Gain/Loss: -3.32
Long AGQ on 5/8/2013 at $25.90  Gain/Loss on previous trade: 33.04% Cumulative Gain/Loss: 29.72%
Short AGQ on 5/9/2013 at $25.33 Gain/Loss on previous trade: -2.20% Cumulative Gain/Loss: 27.52%
Long AGQ on 5/10/2013 at $25.58. Gain/Loss on previous trade: -0.99% Cumulative Gain/Loss: 26.53%
Short AGQ on 5/13/2013 at $25.20 Gain/Loss on previous trade: -1.49% Cumulative Gain/Loss: 25.04%

The "short AGQ" is simply to keep it simple for posting results.  Actually used ZSL for the short legs.

Fri, 06/21/2013 - 15:09 | 3680220 Dr. Engali
Dr. Engali's picture

How did you make it through the spam filter?

Fri, 06/21/2013 - 15:11 | 3680230 fonzannoon
fonzannoon's picture

that post validates me never having visited that other dudes site.

Fri, 06/21/2013 - 15:49 | 3680406 Bay of Pigs
Bay of Pigs's picture

They gave me the boot over there fonz for daring to call his moderators numbskulls.

 

Fri, 06/21/2013 - 15:13 | 3680245 jimmytorpedo
jimmytorpedo's picture

He usually hangs with Turd.

I think there is a joke in there somewhere,...

Maybe to do with Klingons or tapering or sumpin'

Fri, 06/21/2013 - 15:20 | 3680276 Al Huxley
Al Huxley's picture

Pfft! I LOL'd at that one.

Fri, 06/21/2013 - 15:32 | 3680329 Levadiakos
Levadiakos's picture

Turd's afraid to come here anymore since he/she's been proven to be less than a sidewalk barker for the The Matress Barn

Fri, 06/21/2013 - 15:38 | 3680355 neidermeyer
neidermeyer's picture

I was thinking "Fat Bastard" and turtle heads popping out...

Fri, 06/21/2013 - 15:37 | 3680348 Toolshed
Toolshed's picture

Yeah, I just left Turd a few minutes ago and he was quite long. Also, he commented on avoiding SB at all costs, as he is a complete idiot. Wasn't sure who this SB person was.......until now.

Fri, 06/21/2013 - 19:29 | 3680910 Vooter
Vooter's picture

Thanks. I hope your family is gassed in a death camp.

Fri, 06/21/2013 - 15:02 | 3680184 MFLTucson
MFLTucson's picture

Might be wise to look at Gold over the next 5 years rather the past 5 months.

Fri, 06/21/2013 - 15:02 | 3680188 FranSix
FranSix's picture

Adam Hewison was calling for a $200 dollar decline, but only got $100:

http://www.ino.com/blog/2013/06/todays-dramatic-drop-in-gold-came-as-no-surprise/

stockcharts.com:

http://scharts.co/10DzGPF

Fri, 06/21/2013 - 15:03 | 3680189 PaperBear
PaperBear's picture

As the price of gold gets lower you'll find physical gold harder and harder to get hold and when you can get hold of it and with higher and higher premiums.

Fri, 06/21/2013 - 15:06 | 3680204 unwashedmass
unwashedmass's picture

 

laughing....you can't buy it now, either of them, anywhere near the spot. and if you want serious quantity...whoa, it ain't there....

quite a pickle....

a continent worth of paper sold to make this happen.....and not an ounce of the real thing anywhere in the vicinity. 

it is -- at its base --- a completely fraudulent market now....the paper game at the Comex. 

Me, I left two years ago....now only do the physical.....and i'm buying every ounce i can find ---- and excuse me, another 100 bucks down, jesus, i'll mortgage the house.....

but ONLY if I can get the real thing....

i wouldn't touch a Comex "promise" contract with a ten foot pole. Make that fifty feet.

Fri, 06/21/2013 - 19:25 | 3680901 BigInJapan
BigInJapan's picture

I can remember a guy on here who mortgaged his house with silver at $45...

Fri, 06/21/2013 - 22:06 | 3681281 chindit13
chindit13's picture

That is simply wrong.  I regularly check large dealers in international markets.  Physical bid-ask equals paper bid-ask, cash and carry.  You are buying the shillers' hype, or else you think "the market" is the local coin shop or EBay.  It is not.

PMs may or may not go up, but anyone who believes they are a good buy here can find all they can afford at the "paper" price.

Fri, 06/21/2013 - 15:18 | 3680262 ZerOhead
ZerOhead's picture

Absolutely true.

Now consider the sheer insanity of the words you were forced to write;

As the price of gold gets lower (indicating more sellers than buyers) you'll find physical gold (the real stuff) harder and harder to get (less sellers and more buyers) and when you get hold of it it comes with higher and higher premiums (indicating that price is NOT the price)

As I have said before... it will never be cheaper than on the day that there is none at all.

You just have to admire the marvels of modern finance... now if they could just use the same technology to lower everybodies food and gas bills below production costs forever....

Fri, 06/21/2013 - 15:37 | 3680343 Levadiakos
Levadiakos's picture

Denial is a point in the emotional cycle of investing that comes immediately after the top

Fri, 06/21/2013 - 15:44 | 3680388 unwashedmass
unwashedmass's picture

 

keep trying. 

eventually you will find someone willing to dump gold for those treasuries you're holding. there's got to be at least one person as dumb as you. 

Fri, 06/21/2013 - 15:53 | 3680429 Levadiakos
Levadiakos's picture

I sold all my gold Dec 7, 2011. I'll bet you were a buyer that day. Thanks for the bid

Fri, 06/21/2013 - 15:59 | 3680459 jomama
jomama's picture

is that you Leo, have you really come crawling back?

Fri, 06/21/2013 - 16:07 | 3680482 Levadiakos
Levadiakos's picture

jomama, thy name is bag holding eunuch

Fri, 06/21/2013 - 16:42 | 3680613 Peter Pan
Peter Pan's picture

The issue is freedom and that my dear friend disappears when the fiat machine exists to spy on you, send your children to war, destroy your savings and indebt your children's future.

Fri, 06/21/2013 - 19:27 | 3680905 Vooter
Vooter's picture

I hope you're all taking careful notes as the Greek shares his financial expertise...LOL...

Sat, 06/22/2013 - 03:40 | 3681551 Pareto
Pareto's picture

yeah.  i'm fucking in AWE of his baffling bullshit and dickhead attitude.  Reminds me of the 10 year old smart-ass kid down the street I want to slap the shit out of. 

Fri, 06/21/2013 - 15:05 | 3680196 Meat Hammer
Meat Hammer's picture

Gold isn't money and worthless paper backed by political promises has created a prospersous middle class for millenia.

Oh wait, I think I got that backward.  

Fri, 06/21/2013 - 15:06 | 3680200 brunoaa
brunoaa's picture

My biggest fear, what happens to gold when interest rates really start to rise.

Fri, 06/21/2013 - 15:08 | 3680218 unwashedmass
unwashedmass's picture

probably go to the moon because that is when Ben's implosion happens....

what federal, state or local government can withstand higher rates? which one? where? 

rates go higher and the deficits implode.....

and the reality that we really can't service all the debt that EXISTS now...is going to hit home, and the dollar will go to shit. 

anyone buying a US Treasury is buying a fantasy. a complete fantasy. 

we are completely fucked......

Fri, 06/21/2013 - 15:11 | 3680233 Charles Nelson ...
Charles Nelson Reilly's picture

pssst... its all bullshit. Interest rates can't ever go back to normal.

Fri, 06/21/2013 - 15:12 | 3680240 Motorhead
Motorhead's picture

Love, American Style! 

Fri, 06/21/2013 - 15:12 | 3680235 JJ McApe
JJ McApe's picture

remember, if markets collapse gold will also collapse because of panic selling

gold is no safehaven. governments can confiscate it, make it illegal to own, and tax it into oblivion.

most goldbugs are now holding the bags and cry ever night :)

Fri, 06/21/2013 - 15:17 | 3680259 Tinky
Tinky's picture

There's still time for you to work towards a GED.

Fri, 06/21/2013 - 15:38 | 3680354 Levadiakos
Levadiakos's picture

Give him a tip and tell him where you got yours

Fri, 06/21/2013 - 18:17 | 3680820 A. Magnus
A. Magnus's picture

I'll wager he got his GED at the same diploma mill where you got your stunning intellect...

Fri, 06/21/2013 - 15:18 | 3680268 FranSix
FranSix's picture

I think people are ignoring the importance of short term yields on treasury bills, and how it might relate to the function of gold in the event of negative nominal interest rates.

Fri, 06/21/2013 - 15:29 | 3680314 Toolshed
Toolshed's picture

Ok monkey boy, name every occasion you can think of in known human history that gold or silver have been worthless. Now do the same with paper assets. Pretty simple isn't it.

Fri, 06/21/2013 - 15:40 | 3680363 Levadiakos
Levadiakos's picture

Your house is worthless if you owe more than it's worth. pretty simple Skippy.

Fri, 06/21/2013 - 16:12 | 3680505 No Euros please...
No Euros please we&#039;re British's picture

OMG your right, I guess I'll have to live in it or something.

Fri, 06/21/2013 - 16:46 | 3680629 RockyRacoon
RockyRacoon's picture

There is always the utility of the house, as you point out, regardless of the "market value".   If one can refi and pay less than rent, then the deal is a good one.  You gotta live someplace.   I refinanced my house and pay $1K a month PITI for 4,000 sq ft.  Can't rent for that.  Where else am I gonna go?  I have an aversion to the sites under highway overpasses.

Fri, 06/21/2013 - 16:14 | 3680512 Toolshed
Toolshed's picture

I think you meant that YOU are pretty simple there douche boy. If you are trying to make a point, other than the one on your pin head, try again. And harder this time. And don't forget........just because you are so stupid that you are upside down on your house does not mean that everyone else is. Sorry for your misfortune, but it is your parents fault, not mine, that you are so severely intellectually deficient.

Fri, 06/21/2013 - 15:31 | 3680325 notadouche
notadouche's picture

Most gold bugs bought below $500.  I doubt they are crying.  You really don't get what "gold bug" actually means. You like many others just throw the term around like some kind of snariy little insult and sniker, never really understanding what you will never understand.  Only a newbie and or weakhanded trader is in over $1200.  You and those of your ilk were likely shocked that it ever got over a thousand and even more at the time it has stayed over $1000 despite all of the naysayer's and elite banker's and politicians and Buffet's of the world taking a condescending tone to gold ownership.  

If and when markets collapse and gold collapses with it, the tell will be which one bounces back first and best and has staying power.  You will average down on stock price because that's the mantra you entire life but you don't use that same mantra in gold.  Ever wonder why that is?  Let's see, it was good enough to give as a gift to Jesus (if you believe the story), it was good enough for the Pharo's, it was good enough for the earliest of societies and is still collected, stored, guarded, and counted by every government the world over.  If you try to steal it they will shoot you dead on sight.  Every dictator on the run fills his plane with as much as he can steal.  Has done this for thousand's of years but in Apple you trust?  It's ok.  Gold bugs don't judge with such scorn and believe to each his own and whatever helps you sleep at night and is ok with whatever works.  Now which camp sounds more reasonable?  Hmmm...

Fri, 06/21/2013 - 15:41 | 3680375 Levadiakos
Levadiakos's picture

You crapped your pants and won't admit it.

Fri, 06/21/2013 - 15:58 | 3680452 notadouche
notadouche's picture

I wouldn't have to admit it as it didn't happen.  Seems like to me the Bernank is the one that crapped his pants.  I'm not the one involved in subterfuge to try and hold an entire system together.  I just do what I do.  If anything I would be crapping my pants due to the exposure I have in the market.  I will admit I have missed 1000 points of this rally in preparation for some meltdown which may or may not come.  But I still have exposure, just not enough that will break me.  I don't shit my pants because I am not all in on any single asset and my happiness nor whatever wealth I have is not tied to the whims of any one market.  I may never get rich but I won't be poor either unless of course the rest of the world goes all Mad Max and everything is worthless and we are forced to drink our own piss.  At that point I'm pretty much done with the human race experiment will take my leave at the hour of my own choosing as I have no answer or insurance for that scenario.  

Sorry to burst your bubble Levadiakios as you seem to have taken some perverse pleasure in assuming I'm covered in my own feces.  I'm too old and seen too much to have a little market volatility shake my stool.  I have enough sense to realize that none of this really matters and I can't control what I can't control.  I can only control my actions and nothing more.  I was born in shit, that's for sure, and rose out of it based on my own actions and choices and sweat, blood and tears  and I don't particularly wish for anyone else's demise or misery nor do I put myself in a position that one event will bring me to my knees.   Least of all a few hundred points down in any one asset class.

Fri, 06/21/2013 - 16:08 | 3680490 Levadiakos
Levadiakos's picture

douchebag, you talk too much not to be covered in bullshit

Fri, 06/21/2013 - 16:21 | 3680548 notadouche
notadouche's picture

Insults are the last vestiges of a person left without the ability to use intellect, knowledge or experience to discuss, debate, or even agree to disagree.  

Fri, 06/21/2013 - 16:50 | 3680640 RockyRacoon
RockyRacoon's picture

One advantage of gold often overlooked:  It's a great soporific.  I sleep great, no matter what the "markets" are doing.

Fri, 06/21/2013 - 16:27 | 3680564 Toolshed
Toolshed's picture

Notadouche,

You must remember two things when addressing Levadickless:

1) His IQ is smaller than his shoe size, so use monosyllabic words as much as possible or he will throw a tantrum to distract attention away from his ignorance.

2) His attention span is shorter than his very tiny penis. This means that anything longer than a twitter post confuses him and provokes yet another demonstration of his well deserved inferiority complex.

Fri, 06/21/2013 - 15:48 | 3680403 Solon the Destroyer
Solon the Destroyer's picture

The only way confiscation/illegal holding works is if the Government offers you a bribe to dishoard, as they did in the 1930s.  Thus such action would have to take place BEFORE a system crash.

If They do not undertake such action, remember that the crash you are describing is a crash in the faith towards debt-based fiat currency.  Thus those things that are not reliant on such currency for their value, and have no counterparty risk, will not experience panic-selling but rather panic-buying as wealth tries desperately to find some way to preserve itself.

Gold being far more liquid (and portable) than land, will benefit from this panic-buying.

 

Fri, 06/21/2013 - 16:07 | 3680483 DosZap
DosZap's picture

My biggest fear, what happens to gold when interest rates really start to rise.

 

You think most long term holders are going to dump phyzz, and get more/less valuable bennybux?,I do not.What is worse WHEN they do, is the total cease of most loans, and utilization of the trillions benny has already in the system.

Most here have removed their bank holdings, (the fundies on fiat have not changed, and will not),and NOW we have the Bail In bogey man to deal with.

Fri, 06/21/2013 - 15:07 | 3680205 disabledvet
disabledvet's picture

So much to buy. So few greenbacks to do it with.

Fri, 06/21/2013 - 15:54 | 3680435 Levadiakos
Levadiakos's picture

Try getting a GED

Fri, 06/21/2013 - 15:07 | 3680206 Peachfuzz
Peachfuzz's picture

Tensions in the middle east ratcheting up, trying to put on a potemkin recovery on for the whole world to laugh at? Might a person suggest a cheap oil priced in dollars in exchange for phyz? Oh, I see that ya'll got the memo, nm...

 

Fri, 06/21/2013 - 15:09 | 3680219 Tinky
Tinky's picture

It boils down to fundamentals. If you believe in them, then buy or hold PMs at these levels, and relax. If you don't, or your faith in well-thought-out convictions is easily shaken, then by all means sell and/or fret.

Fri, 06/21/2013 - 15:13 | 3680222 Kirk2NCC1701
Kirk2NCC1701's picture

What's ahead?  Lower prices, till the tipping point is reached for bullion.

No one outside TPTB has the perfect crystal ball. 

 

Like in real estate, "It's always a good time to buy".  Until it isn't.  For every scenario of "BTFD" of any asset class, there is a scenario where the case breaks down. No asset is 100% safe.  Not even 99% safe.

E.g. Gold bulls (purveyors) will never admit that PM could become relatively meaningless in the Western countries, if their CBs agree to peg their currencies to the SDR.  And if the SDR were based on a basket of REAL ASSETS, which could be a mix of Energy/Oil and PM.  In energy-poor China, their currency would be pegged to the SDR more on gold, but in US and Canada it could be based more on energy.  If that were to happen, it is very difficult to predict with certainty what all the outcomes are for the private investor/speculator/stacker.  The $10,000/oz may NEVER be realized for US owners.

I like to do my own critical thinking, lest I too become another lemming, following the herd over the fiscal cliff -- like those indebted college grads.  That's why I take everything with a grain or shovel of salt -- from both sides (bull, bear) of the PM aisle.

Fri, 06/21/2013 - 20:51 | 3681124 WmMcK
WmMcK's picture

Pegging a (SDR) currency to energy could prove to be transitory ... just saying.

 

Fri, 06/21/2013 - 15:10 | 3680223 JJ McApe
JJ McApe's picture

3g's

gold, guns and a getaway plan

Fri, 06/21/2013 - 15:11 | 3680227 Motorhead
Motorhead's picture

Gerald Celente, at your cervix.

Fri, 06/21/2013 - 15:25 | 3680301 Kirk2NCC1701
Kirk2NCC1701's picture

Very funny.  Actually, this is the time -- once again -- when the lemmings will learn to think for themselves and stick to basics:

"When you cannot proceed on robust information or on trust, you MUST proceed on Principles!"

This is even MORE important the "possession", because you may 'posses' the wrong thing at the wrong time.  Therefore: Allocate, allocate, allocate. 

Allocate your assets into Primary, Secondary and Tertiary wealth.  Allocate (spread) each of these by asset class, geography (not just in US) and asset manager (not just 1 manager).  It is the only, time-proven method of managing & mitigating risk.  Else, proceed at your own peril. 

And if you're too pig-headed or too dumb for these principles, you deserve what's coming:  a slaughter.

Fri, 06/21/2013 - 15:10 | 3680225 Motorhead
Motorhead's picture

The fucking trend in Au & Ag is fucking down, period.  The pumping monkeys on the various Web sites keep howling about manipulation.  Who gives a fuck?  (Unless, of course, the "manipulation" pushes the price UP.)  The trend is down.  Until snot.

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