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In Gold We Trust - From Aurophobia To Valuation

Tyler Durden's picture




 

"Even though the consensus is convinced that the gold bull market has ended, we remainfirmly of the opinion that the fundamental argument in favor of gold remains intact. There exists no back-test for the current financial era. Never before have such enormous monetary policy experiments taken place on a global basis. If there ever was a need for monetary insurance, it is today."

Via Pater Tenebrarum of Acting-Man blog,

We are happy to once again present the annual gold report by Ronald-Peter Stoeferle and his co-author Mark Valek. Although Ronald is no longer with Erste Group in Vienna (he is now a managing partner at Incrementum AG in Liechtenstein), he still writes the 'In Gold We Trust' report for Erste Group in his role as an external advisor. The version of the report that we are offering for download here is the extended Incrementum version, which inter alia contains a section on gold stocks and a number of elaborations on topics which are not as extensively discussed in the shorter version.

In spite of this year's decline in the gold price, we still trust in gold, one might say. There are a few valid reasons for the recent bearish trend, some of which Ronald dissects; nevertheless, the bet remains that it is very likely undergoing a large degree correction in a secular bull market.

As we have already remarked on occasion of previous editions, Ronald was and remains one of the very few analysts working at a mainstream institution (or in this case as an external advisor to one), who truly understand how the gold market works in terms of price formation and how it should therefore be analyzed. In chapter 3 of the report, this topic is thoroughly examined, including the fact that gold's high stock-to-flow ratio is precisely what gives it its importance as a monetary asset (and is a major reason why it was chosen as money, i.e., the general medium of exchange, in times past, before governments imposed fiat money). Chapter 3 also contains an interesting subsection on 'aurophobia' and its psychological roots.

Financial repression also receives an in-depth look in this year's report. The term was rediscovered by Carmen Reinhart and Belen Sbrancia and describes the many ways in which governments that have accumulated too much debt organize the theft of the citizenry's assets by underhanded means in order to avoid having to enact politically unpopular measures.

Obviously this is a topic that is highly relevant to gold investors, as a result of a number of unique properties gold possesses. After all, governments cannot devalue it at will. In the longer term, they can only lessen investor appetite for gold if they institute policies that are the polar opposite of those that are characteristic of financial repression. Moreover, gold represents relatively mobile wealth, that nevertheless exists physically and does not depend on counterparty promises (including that most rapacious of counterparties, the State). As such it offers investors a means to protect themselves against financial repression, at least as long as its possession is legal (as we know from historical experience, there is no guarantee that it will remain so, even if it appears likely from today's vantage point).

The chapter on financial repression also makes clear why it is erroneous to compare today's vast public debt/ financial repression combination to that of the post-war period.

Another new feature in this year's report is the attempt to approach the valuation of gold from a quantitative standpoint. Specifically, a regression model that looks at probability-weighted scenarios of future Fed balance sheet trends strikes us as quite interesting. Of course, the value of gold is subjective, as are all values. Since it pays no stream of dividends (why that is the case is also explained in the report) and issues no financial statements, one cannot apply any of the valuation methods that are employed in valuing stocks or bonds. However, it is possible to ascertain gold's relative value versus a range of other investable assets and where it stands at a given point in time in the historical context. We were actually surprised to learn how moderately valued gold still is when looked at in this manner in spite of the advance since 1999/2000.

 

 

 

In GOLD We TRUST 2013 - Incrementum Extended Version by zerohedge

 

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Thu, 06/27/2013 - 11:35 | 3699318 ParkAveFlasher
ParkAveFlasher's picture

Extended versionz, bitchez!

Thu, 06/27/2013 - 11:37 | 3699327 The Shootist
The Shootist's picture

Aurophobia- I'll have to use that more often. Is it like hippies' fear of carbon?

Thu, 06/27/2013 - 11:40 | 3699333 ParkAveFlasher
ParkAveFlasher's picture

Hippies do fear carbon, except when scraping the resin off the mesh in their bowl.

What I want to know is, which ZHer is selling their bullion for good.  I for one am thanking my lucky stars because this makes my acquisition schedule a bit more rosy.

Thu, 06/27/2013 - 11:44 | 3699355 cifo
cifo's picture

Gold is monetary insurance. You don't sell your life insurance, do you?

Thu, 06/27/2013 - 11:57 | 3699414 francis_sawyer
francis_sawyer's picture

In gold we THRUST...

Thu, 06/27/2013 - 12:06 | 3699447 Pladizow
Pladizow's picture

To: Cifo - google "Life Settlement"

Thu, 06/27/2013 - 13:08 | 3699709 cifo
cifo's picture

Thanks. It looks like another financial instrument to benefit brokers/financial planners/advisers/attorneys/estate planners and other low life.

Thu, 06/27/2013 - 13:33 | 3699792 dryam
dryam's picture

gold/silver down 1.5% all of a sudden with no move in ANY other asset class (no move in Palladium or Platinum either)

Thu, 06/27/2013 - 13:08 | 3699711 BaBaBouy
BaBaBouy's picture

For Todays Financial YUPPIES... ``IN BEN-SHALLOM WE TRUST``

They Will Learn New Lesson Soon ...

Thu, 06/27/2013 - 12:30 | 3699504 deKevelioc
deKevelioc's picture

Since I'm all-in, I expect central banks to walk into the abandoned warehouse, douse the place with high-octane gas and drop a match, killing them in the process.

Thu, 06/27/2013 - 13:42 | 3699837 margaris
margaris's picture

I salute you, sir.

Thu, 06/27/2013 - 11:53 | 3699393 GubbermintWorker
GubbermintWorker's picture

I haven't sold a single ounce of gold, silver, or lead that I have accumulated over the last five years. I do however continue to scrape the resin off the mesh of my bowl.

Thu, 06/27/2013 - 12:56 | 3699664 resurger
resurger's picture

Is JP Morgan done buying?

Thu, 06/27/2013 - 13:27 | 3699777 Harbanger
Harbanger's picture

Comex "sold" 32% of their physical gold inventory in the last 5 months.  Pretty soon it will all be gone.

Thu, 06/27/2013 - 13:44 | 3699854 ChanceIs
ChanceIs's picture

Didn't Gordon Brown sell most of the UK's gold at the bottom.  You know....."Brown's bottom." That would includes his preannouncement of the sale.  That way he got a better price.

So I think tha obvious conclusion is that when people in authority sell their gold it is at the worst possible time and that the bottom is in - or has been put in.

Thu, 06/27/2013 - 13:54 | 3699891 Harbanger
Harbanger's picture

You may be right when you say "That way he got a better price".  There's no denying that physical inventories are flying out fast.  What's comex going to trade without physical excpt paper for paper?  Physical will skyrocket when there's a shortage.

Thu, 06/27/2013 - 13:56 | 3699911 Herd Redirectio...
Herd Redirection Committee's picture

And the fact that people are withdrawing their gold... Tells you gold in your hand is not the same as gold held for you by Comex!

Thu, 06/27/2013 - 13:36 | 3699808 Kirk2NCC1701
Kirk2NCC1701's picture

More money can be made from tax moves than with gold.  Am listening in on a Members Only web-conference from Simon Black, as I type. 

None of this PM wanker-material of "Well, 'fundamentals' say that gold ought to be $7000/oz", but VERY specific, detailed and actionable info. 

Look, you can keep dissing and pissing in the wind all you want.  I really don't give a sh!t  You can stay all girly and emotional and Rage On, respond with personal attacks, or...

You can cool down, get smart, get informed first-hand, and take whatever steps you need to keep from getting bum-blasted by the Elite Oligarchs acting via your beloved Gov.  Best wishes.

 

Thu, 06/27/2013 - 14:01 | 3699932 Herd Redirectio...
Herd Redirection Committee's picture

Actionable!  God, Simon loves that word...

Thu, 06/27/2013 - 13:53 | 3699888 hankwil74
hankwil74's picture

Too bad.  If you sold 2 years ago and bought today, you could have a hell of a lot more than what you have now.  

Thu, 06/27/2013 - 17:15 | 3700969 auric1234
auric1234's picture

It's so easy for you to say that now. If I had a crystal ball, I too would have sold 2 years ago to buy it back later.

But, I know the fiat toilet paper is going under sooner or later. I may not be able to predict everything, but one thing's for sure: when the music stops, I WON'T BE THE BAGHOLDER.

 

Thu, 06/27/2013 - 13:06 | 3699699 Alexandre Stavisky
Alexandre Stavisky's picture

By their fruits ye shall know them.  And also, seek ye first the kingdom of heaven and all these things shall then (afterwards) be added unto you.  Take the opposite and you know who speaks it.  Seek first the awards and accolades of this world, and diminish the good, seek to extinguish the sacred, deny the divine...what shall be added unto you? Sow the wind...

And what do we have now?  Obviously secret combinations of those who seek the vanities of the earth: wealth, power, personal (unearned) exaltation.  To win it by intrigue, by combination, by leverage, or application of "magic", to GET by another means other than honourable endeavour.  And who is the author of it all?  And who, these bad blackhearted actors sometimes called sociopaths?  Just those gone over to the empire's dark side listening to the artful, cunning One who draw men off one after another as they lose the capacity to distinguish any larger path than their mortal ambitions.  And as THESE go about seeking to snare men's souls and fortunes and delight in the rancour and tribulation they provoke, little do they realize how terribly ensnared they have become.  Everwhile distant watchers mark and account every jot and tittle, which the malefactors will eventually woefully repay in another time and season.  As done unto them is what they have done unto others.

"Who for one sweet grape would ALL the vine destroy?", also "Who for a minute's mirth would wail a week (or lifetime)?"

And so this secret black empire seeks to obtain the land little by little, first with small frauds and "LIES undertaken for the common good".  Then full scale assaults upon every moral and ethical code revealed to mankind.  Where in the spectrum are we now?  And how much more grievious shall be the burdens to come?

http://www.golemxiv.co.uk/2013/06/secrets-and-lies/

Thu, 06/27/2013 - 12:23 | 3699487 Ghordius
Ghordius's picture

Aurophobia is the grandmother of Europhobia

many think that because I sport the EUR sign I would not love to have gold back as monetary metal

My nick is Ghordius, and I'm a stacker

yes, I still think that in the current environment stacking is sanity, and that the EUR "project" is the other part of sanity

just think about it: imagine any country using gold or a fully gold-backed currency in this environment as it is currently driven

remember how two years ago a lot of people were talking about switching to gold as accounting and billing unit for their businesses? I wonder how they are/were faring, after having experienced those kind of fluctuations in the FX they have vs the rest of their environment

but hey, this is exactly the reason why hundreds of tons are thrown on the market: "shake the baby". The fight between currencies has always been about which one is more stable, in the short and medium term, and which one dies last, in the long term

though not worry - gold has a glass chin, it's easy to get it on the mat for a while... but it also has immense staying power

and so, in gold I trust, too

Thu, 06/27/2013 - 12:30 | 3699532 Frank N. Beans
Frank N. Beans's picture

"My nick is Ghordius, and I'm a stacker"

<golf clap>  

Thu, 06/27/2013 - 12:38 | 3699569 Ghordius
Ghordius's picture

2y, 14 weeks old account and I've never seen you. bring some argument

Thu, 06/27/2013 - 13:30 | 3699735 Frank N. Beans
Frank N. Beans's picture

okay thanks for putting this out there.

Here is my 2-cent opinion: 

Gold goes higher when interest rates are less than rate of inflation.  Because of QE, rates have been lower than inflation and gold did well.

Recently interest rates have shot up, due in part to talk of tapering.  So now interest rates are higher than inflation so gold reacts negatively.  There are other factors in the price movement of gold but this seems to be a big overarching one. 

edit:  also I've made numerous snarky and a few not so snarky comments on ZH; I can't help it if you haven't seen them. 

Thu, 06/27/2013 - 13:51 | 3699879 sdmjake
sdmjake's picture

So interest rates are now higher than govt statistical inflation rates so that is why gold is down?

Inflation at my house is running much higher (and has been for years) than any interest rates. That has not changed of late.

JPM has some BIG empty shelves to fill by Sunday. Take spot price down and cover the orders with cash. (Could this be the month they get caught out? nah...)

Thu, 06/27/2013 - 13:10 | 3699720 Kirk2NCC1701
Kirk2NCC1701's picture

Schadendfreude:  Why should I be the only one underwater?

Lucky for me, I got more FRNs --> The more it drops, the more I shops!  Keep dropping.  I'll keep shopping.  Yihaa!

Thu, 06/27/2013 - 12:35 | 3699552 Ghordius
Ghordius's picture

btw, on page 8 there is a canard, imho: "The next chart shows that the price of gold is suffering from the (temporary) return of confidence in the euro zone". Sure. Billions of people decide on gold depending on the "confidence in the eurozone"/s

this is again one of those propaganda trends I will just never understand - or at least nobody ever explained to me in a way my mind gets around it

Thu, 06/27/2013 - 13:21 | 3699668 Ham-bone
Ham-bone's picture

Gold smackdown results in heavy selling of paper GLD (leveraged credit) to buy phyz gold (unleveraged capital)....phyz buying which is supplied by heavy GLD and COMEX / LBMA phyz outflows alongside significant shorting in the paper market pushing price and disgorgement further.  But these phyz buyers worldwide are strong hands...ie, once they purchase and hold the phyz, it's good as gone as they generally only buy n hold vs. paper traders rapid movenments.

Now, when one realizes this price takedown means that available phyz inventories are very thin and thinning further - any subsequent price rise and rise in demand by paper GLD will also meet neccesary buying by the paper GLD...but where o where will a rising GLD find the phyz to meet a turnaround in it's underlying price?  And where o where will the shorts find deliverable gold?

So many elements here for a potentially explosive upward movement vs. the continued downside risks that gold goes to $1100 or $850...so there is unlimited upside potential vs. another 20% or 30% downside...and any downside only slows mining, exploration, and exarcerbates thin inventories w/ continued GLD redemptions...amazing opportunity and only highlighted by the talking heads telling you to abandon all hope for gold.  The opportunity for silver is multiples that of gold as there is so little above ground silver available (3mo's vs gold large above ground holdings) and any upside can generally only be met w/ new supply...the squeeze here would be epic.

If there is any lose of control to the downside price, the upside will be astounding...which either means they won't lose control or will lose control because they are standing on the long side.

Thu, 06/27/2013 - 11:37 | 3699324 SafelyGraze
SafelyGraze's picture

here's what we know about the value of gold:

The Palatine Crown or Bohemian Crown is the oldest surviving crown of England. It was produced from gold, enamel, sapphires, rubies, emeralds, diamonds and pearls (height 18 cm, diam. 18 cm).

The English Queen's crown was likely produced about 1370 and has been associated with Queen Anne of Bohemia, the consort of King Richard II of England.

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

 

Thu, 06/27/2013 - 11:40 | 3699329 Manthong
Manthong's picture

I have not been paying attention lately..

So I need to ask if they are mining thousands of billions of ounces at the same rate banks are printing thousands of billions of dollars, euros, pounds .. whatever?

..or quads of yen..

Thu, 06/27/2013 - 11:44 | 3699351 The Shootist
The Shootist's picture

All I know is, Liesman says there's only deflation, and no one, least not central banks, would ever manipulate gold/silver prices. Despite them manipulating everything else. [/sarc]

Thu, 06/27/2013 - 11:44 | 3699353 ParkAveFlasher
ParkAveFlasher's picture

Who knows the truth about the supply, the prices, the markets, etc.  One gold guy that everyone listens to says COT shows net longs, another gold guy that everyone listens to says COT is a crock of shit, another gold guy that everyone listens to says look at the technicals and draw a sunflower fractal pattern on them, etc...

It's shiny, it's heavy, no one knows jack about it, it's coveted and hidden and lorded over, I like it, I like it like I like dangerous poontang, I keep my knowledge of it close, no one knows where the preciouses is hidden, give us $55,000/oz fat stupid JPM hobbitses.  Why does JPM hates us so, when we means it no harms?

Thu, 06/27/2013 - 12:23 | 3699499 Uchtdorf
Uchtdorf's picture

Bravo!

Thu, 06/27/2013 - 12:52 | 3699639 jimmytorpedo
jimmytorpedo's picture

+1 for dangerous poontang.

AU,... bitchez, get in my car!

Thu, 06/27/2013 - 13:09 | 3699716 joego1
joego1's picture

dangerous poontang = no gold for you

Thu, 06/27/2013 - 13:26 | 3699771 Manthong
Manthong's picture

Bling be the thing whens you doin’ yo thing with the girls on the string.

Maybe I should consider pursuits in contemporary poetry.

Thu, 06/27/2013 - 14:08 | 3699981 Herd Redirectio...
Herd Redirection Committee's picture

Don't sell your gold for dollars.  Exchange it for new dollars when the time comes.

Thu, 06/27/2013 - 15:45 | 3700551 Manthong
Manthong's picture

but you should be careful that FDR does not come back from the grave to steal it from you before the revaluation.

Thu, 06/27/2013 - 13:34 | 3699798 Meat Hammer
Meat Hammer's picture

Remember, it starts as herpes, but then becomes yourpes.

Thu, 06/27/2013 - 13:32 | 3699793 Meat Hammer
Meat Hammer's picture

I had a horse laugh after that one.  God bless you ParkAveFlasher.

Thu, 06/27/2013 - 14:21 | 3700064 FeralSerf
FeralSerf's picture

Like Hillary? Vince Foster might be able to tell us how dangerous that poontang was if he hadn't gone and committed "suicide".

Moral: just because it's dangerous does not mean it's desirable.

Thu, 06/27/2013 - 11:41 | 3699335 jubber
jubber's picture

Deflationary collapse bitch

Thu, 06/27/2013 - 13:17 | 3699747 Shell Game
Shell Game's picture

Global, weaponized (leveraged) debt - deflationary spiral - Quantitative panic - currency collapse (hyperinflation) - deflationary collapse.  Yes.  Your point?  Think half of the world is not going to abandon the $USD in the not too distant future?   The only duct tape holding this shit together in the Military Industrial Complex - and the entire world is turning into a Graveyard of Empires....

Thu, 06/27/2013 - 11:41 | 3699338 JJ McApe
JJ McApe's picture

protip: never catch a falling knive

Thu, 06/27/2013 - 12:34 | 3699554 Levadiakos
Levadiakos's picture

more like a falling bomb

Thu, 06/27/2013 - 13:31 | 3699790 IridiumRebel
IridiumRebel's picture

never listen to a shithead with an agenda

Thu, 06/27/2013 - 11:43 | 3699346 NoWayJose
NoWayJose's picture

I do not own gold because of QE, nor do I fear the end of QE. I own it because the US has $17 trillion in debt, is adding more than a trillion a year to that total, and there is no one in Congress willing to vote for any austerity. This cannot end happily for the US dollar. I can live with short term pain (and buy more) but I cannot think of anyplace better to be in than gold - when the bubble finally pops.

Thu, 06/27/2013 - 12:24 | 3699501 Fuku Ben
Fuku Ben's picture

Derivatives will collapse the fiat system faster and long before debt

Long Gold, Guns & Grub

Thu, 06/27/2013 - 12:36 | 3699560 GVB
GVB's picture

$441 Trillion interest rate derivatives will do the job. It's like shooting an ant with a bazooka.

Thu, 06/27/2013 - 15:18 | 3700430 vulcanraven
vulcanraven's picture

The image of that made me chuckle :)

Thu, 06/27/2013 - 12:30 | 3699505 xtop23
xtop23's picture

Ding, ding, ding! 

Tell him what he's won Don Pardo....

An all expense paid lifeboat to the other side of a collapsing paradigm!!

/queue applause

Thu, 06/27/2013 - 12:31 | 3699537 Ban KKiller
Ban KKiller's picture

Likewise here in Granada, Nicaragua. Inflation is here like anyplace else. Shave now two bucks up from a dollar three years ago. Ten mangos now a buck up from fifty cents. Basically everything has doubled in three years. Brought some phyzz with me from the states and may try to sell some...I mean one! Buffalo generic round. 

Thu, 06/27/2013 - 12:37 | 3699561 Levadiakos
Levadiakos's picture

I can buy a 3BR house there for $1,500.

Thu, 06/27/2013 - 13:30 | 3699787 IridiumRebel
IridiumRebel's picture

hope your windows are bullet proof

Thu, 06/27/2013 - 13:55 | 3699902 Levadiakos
Levadiakos's picture

I wasn't talking about Los Angeles

Thu, 06/27/2013 - 12:48 | 3699614 RockyRacoon
RockyRacoon's picture

About that gold "bubble"...

 I do think we will have a bubble in gold, although it may take the form of a collapse of the monetary and a return to some form of gold as money in which case, the bubble will not end, it would simply transition over to the new system in which gold would go from being a non-money asset to money.

I have been following this market since the late 90s. I remember reading that gold was in a bubble at every price above 320 dollars. I very much like the writings of William Fleckenstein, an American investment writer. He has pointed out how often you read in the financial media that gold is already in a bubble, a point he quite rightly disputes. Fleckenstein has pointed out that the people who say this did not identify the equity bubble, did not believe that we had a housing bubble, nor have they identified the current genuine bubble, which in the bond market. But now these same people are so good at spotting bubbles that they can tell you that gold is in one.

Most of them did not identify gold as something which was worth buying at the bottom, have never owned a single ounce of gold, have missed the entire move up over the last dozen years, and now that they’re completely out of the market, they smugly tell us for our own good that gold is in a bubble and we should sell.

So, I don’t know that we need to listen to those people and take them very seriously.

http://goldswitzerland.com/what-is-key-for-the-price-formation-of-gold/p...

Thu, 06/27/2013 - 13:21 | 3699759 Thisson
Thisson's picture

I read that today too.  I thought it was a terrific article.  I think he should have put a bit more emphasis on interest rates as a measure of the attractiveness of other assets, but still I think the article hit a lot of fundamental points right on target. 

Thu, 06/27/2013 - 13:43 | 3699843 Meat Hammer
Meat Hammer's picture

they smugly tell us for our own good that gold is in a bubble and we should sell...

...to them!

Thu, 06/27/2013 - 11:47 | 3699360 chubbyjjfong
chubbyjjfong's picture

I am fully blown out of all gold analyses and possible paper consequencial price movements today. Its like a gold sensory overload.  Its going down, I don't give a shit because I'm keeping my little pile (however pathetic it may be). I'm off to water my tomatoes and beans.

Thu, 06/27/2013 - 11:50 | 3699375 duo
duo's picture

must be nice.  My beans are dead from the heat, and my tomatoes are leafless stalks from the hornworms.

Thu, 06/27/2013 - 12:38 | 3699572 sudzee
sudzee's picture

I hear Monanto has a fix for ya. Look great but don't eat.

Thu, 06/27/2013 - 12:47 | 3699608 SwimmininNawlins
SwimmininNawlins's picture

I have been dusting diatomaceous earth (DE) on my tomato plants and it seems to keep the worms away and it's completely safe to eat. 

Thu, 06/27/2013 - 12:02 | 3699432 Boston
Boston's picture

Its going down, I don't give a shit because I'm keeping my little pile

 

It's going down. Maybe.

I don't give a shit. I DO give a shit; the more it falls, the more attractive it becomes to buy.

I'm keeping my little pile. Not me; I'm ADDING to my growing pile.

Thu, 06/27/2013 - 12:16 | 3699462 chubbyjjfong
chubbyjjfong's picture

I guess I could sell a kidney. Other than that, I'm all ends tapped out. I'm hangin onto my job by a thread man. I'm quite honestly very scared.

Thu, 06/27/2013 - 12:51 | 3699630 Professorlocknload
Professorlocknload's picture

Chubbyj,

Fear as fuel...http://zenhabits.net/fear-to-free/

Thu, 06/27/2013 - 12:32 | 3699541 SmallerGovNow2
SmallerGovNow2's picture

added a hundred ounces of silver dollars this morning...

Thu, 06/27/2013 - 12:55 | 3699657 Kirk2NCC1701
Kirk2NCC1701's picture

Joke for Canadians (from Ontario): 

If you have Auroraphobia, move to Richman Hill.

Thu, 06/27/2013 - 13:44 | 3699852 robertocarlos
robertocarlos's picture

Ajax you to explain that joke.

Thu, 06/27/2013 - 12:21 | 3699492 greatbeard
greatbeard's picture

>> I'm off to water my tomatoes and beans.

Different strokes.  I'm trying to force myself back out into the stiffling heat and humidity to spray fungicide on my tomatoes as we've had rain, rain, rain.  But, the vines are hanging full of tomatoes.  I've canned (and frozen) over 100 pints of green beans and about 50 of black eyed peas.  I've put up 50 bags of a frozen squash/onion/pepper concoction I'm fond of.  I've got more onions that need harvesting and drying, corn that needs canning, a few more squash to dehydrate and a whole bunch of winter squash to bring in.  I'm getting ready to turn under the beans, peas and squash.

Thu, 06/27/2013 - 12:31 | 3699535 SmallerGovNow2
SmallerGovNow2's picture

you do this full time?  I'm envious.  I've got three small square foot plats about 4' x 8' and experimenting with lots of stuff....  good luck GB...

Thu, 06/27/2013 - 12:41 | 3699583 greatbeard
greatbeard's picture

>> you do this full time?

Yes, polite people call it retirement but realists call it long term unemployment.  I bailed out of the system almost three years ago to a little hobby farm on five acres.  As a life line to improving my economic situation I put in a fair amount of time renovating my shack and improving my property in the vain hope that I may actually be able to flip this place if my finances contine their hell bent on destruction ride into oblivion. 

But yes, mostly I just garden and preserve.  I put in 40 fruit trees and 30 berry bushes which will need another two years to give me a decent harvest.  I also put in a 70 X 110 garden plot that appears to give me all I can handle garden wise.  The harvest is coming in faster than I can preserve it.  Wiser folks than me (that would be a bunch of people) say it takes about five years to get proficient at farming.  I can see that.  I'm in my second year and although I'm amazed at the success, I can see many improvement to be made. 

Thu, 06/27/2013 - 13:41 | 3699829 Ignorance is bliss
Ignorance is bliss's picture

I pay a guy $60 bucks every two weeks and he brings me a big box of organic vegitables from his (retirement) hobby farm. Its good for me and good for him. I focus on herbs in my little plot (backyard). 

Thu, 06/27/2013 - 13:45 | 3699856 klockwerks
klockwerks's picture

You go GB. I was raised doing the same thing. Did all the above but to old now so I buy the can goods and freeze food etc. No matter how you get ther as long as you can eat your good to go. Wish you the best and wish I could advise young people how to farm, garden etc.

Thu, 06/27/2013 - 13:54 | 3699892 greatbeard
greatbeard's picture

Thanks for the kind words.  I wish you were nearby so I could give you some of my produce.  There's something spiritual about giving food you've grown or preserved to others.

Thu, 06/27/2013 - 14:37 | 3700162 Car 54 Where Are U
Car 54 Where Are U's picture

Amen

Thu, 06/27/2013 - 12:56 | 3699571 Kirk2NCC1701
Kirk2NCC1701's picture

I want to Believe.  I want to Believe.  I want to Believe.

I want to Believe.  I want to Believe.  I want to Believe.

Thu, 06/27/2013 - 11:51 | 3699380 gjp
gjp's picture

Copied from an early thread to see if anyone has any thoughts:

With paper futures seemingly in full control of the monetary puppet masters, I've been thinking - again - about how gold might ultimately pay off as an investment or at least as insurance.  There are two ways ultimately as I see it, both depend on the end of the US dollar reserve status, and both of these are by no means certain even if/when the US dollar loses its place.

First is a new currency regime (surely based in China / Asia) that is gold-backed.  There have been rumours that China is planning such a thing, and maybe the orchestrated plunge in futures helps them pick up more cheaply, although the volatility and race to zero wouldn't help them make the case for a gold-backed currency ... I guess with the manufacturing base they have if they say they want a gold-backed currency the world would have to follow along anyway.  This is a best-case scenario for gold.

The second possible payoff is in a total fiat collapse, no currency regime emerges, it's anarchy or anarchocapitalism at best.  Hard to say whether gold works or not, and really not a scenario anyone wants to imagine.  Probably still worth having gold as insurance along with other more useful hard assets (and weapons).

Regardless it seems less and less likely that there will be any fiat payoff while the US dollar remains in charge.  Bring it down already this has gone on way too long!

Thu, 06/27/2013 - 11:52 | 3699385 sus sapientiae
sus sapientiae's picture

Slightly off topic, but I just now received a call from a local bullion dealer offering to sell any quantity of Silver Eagles or silver bars and at relatively low premium.  Not sure if its true of gold as well, but there seems to be no shortage of physical silver in my neighborhood at the moment.

Thu, 06/27/2013 - 12:16 | 3699479 Car 54 Where Are U
Car 54 Where Are U's picture

I'm buying physical gold from a small US miner at 5% BELOW spot. Assay certified, numbered and 99.95%. 1-10-100 Troy oz bars. The refiner will buy back at 1% below spot! 4% profit locked in or just keep buying at discount. Ships worldwide. Limited monthly production but if anyone is interested let me know and I'll hook you up. Greg@logigold.com

Thu, 06/27/2013 - 12:37 | 3699563 The Shootist
The Shootist's picture

I make $1000 a day buying MBS's at the Fed's prop desk in NYC. If you think your scummy enough, give us a call, we're hiring. 1800BENJAMIN'

Thu, 06/27/2013 - 13:20 | 3699755 DosZap
DosZap's picture

I'm buying physical gold from a small US miner at 5% BELOW spot. Assay certified, numbered and 99.95%. 1-10-100 Troy oz bars. The refiner will buy back at 1% below spot! 4% profit locked in or just keep buying at discount. Ships worldwide. Limited monthly production but if anyone is interested let me know and I'll hook you up. Greg@logigold.com

Dude Windows IE9 cannot FIND this link,something off here?,you have been a member for nearly 2yrs,so let us all know if a correction is needed.

Thu, 06/27/2013 - 13:26 | 3699772 Thisson
Thisson's picture

What link?  It's an email address.  I'm curious about it since there actually is a Company named LogiGold and it does have an executive named Greg.  Google LogiGold and check out some of the results.

Thu, 06/27/2013 - 14:34 | 3700146 Car 54 Where Are U
Car 54 Where Are U's picture

Yep it's me. Small miner and he just wants me to sift the interest before handing his contact points over. That's why I put the email address in the comment. If your not interested in learning more and speaking directly, no worries.

Thu, 06/27/2013 - 12:25 | 3699509 greatbeard
greatbeard's picture

>> offering to sell any quantity of Silver Eagles or silver bars and at relatively low premium.

I set up a stand at our rural recycling and garbage drop off location.  Free disposal of gold and silver.  My biggest problem is picking up the overflow from the two 55 gallon drums I empty twice a day.  I know folks are anxious to get rid of the worthless relick, but I wish they'd be patient and wait until there was room in the dumper.  Inconsiderate shits.

Thu, 06/27/2013 - 12:28 | 3699528 sus sapientiae
sus sapientiae's picture

+100

Thu, 06/27/2013 - 12:34 | 3699548 oddjob
oddjob's picture

Glad to see you created an i.d. 3 weeks ago to share that.

Thu, 06/27/2013 - 12:38 | 3699573 Levadiakos
Levadiakos's picture

The houseboy chips in. Don't you have a car to wash or a dog to walk?

Thu, 06/27/2013 - 12:48 | 3699618 oddjob
oddjob's picture

yes. I have 3 dogs I usually walk everyday. I find that more enriching than watching grown men kick a ball back and forth.

Thu, 06/27/2013 - 13:57 | 3699916 Levadiakos
Levadiakos's picture

Many Greek men have other charms to which you're likely drawn

Fri, 06/28/2013 - 02:04 | 3702543 Lord Koos
Lord Koos's picture

Hey Lev, did you hear about the little Greek boy who ran away from home?

 

He didn't like the way his father was rearing him.

Thu, 06/27/2013 - 12:42 | 3699590 sus sapientiae
sus sapientiae's picture

...knowledge being a collection of various anecdotes... incidental experiences which may be relavent to some and not to others.  

3 weeks, 3 months, 3 years.... i suppose we all start somewhere, eh?

Thu, 06/27/2013 - 12:55 | 3699651 oddjob
oddjob's picture

I also can go to my local bullion dealer and buy as much as I choose too. http://www.vbce.ca/rates/precious-metals Only difference is I posted the link. That's usually a good place to start if you're not lying.

Thu, 06/27/2013 - 12:34 | 3699549 sudzee
sudzee's picture

That was the NSA who called. Does your local bullion shop really have your number?

Thu, 06/27/2013 - 12:45 | 3699601 sus sapientiae
sus sapientiae's picture

I called at the April smackdown to ask about making a purchase.  I couldn't even get the time of day from them... was told to buy online and avoid state sales tax.  Fast forward to today and now they want to chat.  Just thought it odd.

Thu, 06/27/2013 - 13:03 | 3699690 Dubaibanker
Dubaibanker's picture

Here in Dubai, market is slow, being the largest physical gold market in the world and all that, bought some physical yesterday although last month physical was hard to find. With India's rising retail demand and closing of purchases of coins, bars and investment products for retail investors, expect gold prices to explode as soon as someone screams FIRE in the middle of a cinema hall while Batman is playing! :) or shall I say, Superman!

Small financiers as well as jewellers in UAE and India should expect closures because RBI has banned loans against gold bullion for Non Banking Finance companies and also against gold ETF and gold loans thus restricting demand for the poorest while incentivising smuggling and hoarding. http://www.livemint.com/Money/3f0epVjtsMiAeVIyJwfjkK/Loans-against-gold-...

The largest retail market in the world with 1.2bn people cannot handle bans very well and physical gold premiums should rise.

Let the gold runs begin...Meltdown of the middle men aka jewellers comes first. http://blogs.wsj.com/moneybeat/2013/06/27/in-india-gold-related-shares-m...

One of the largest jewellery store operators has plunged 60% in 2 months. https://www.google.com/finance?q=NSE:GITANJALI&ei=mm_MUci1EIvqlAWWhgE

Thu, 06/27/2013 - 11:52 | 3699388 disabledvet
disabledvet's picture

good article over at SA i read. i understand "it's gold" and "unlike all other assets it alone is incapable of being governed by the laws of supply and demand." it ain't going back to 35 bucks and ounce and no government will be on the gold standard anytime soon that i can tell. the only two i see in North America are Texas and North Dakota. Never understood why Spain never went on a gold standard actually. man. look at all the real estate they used to have. oh, well. can't think of everything. obviously the current price decline "in lieu of a gold standard" is nothing new. i know...i know "but the Fed is doing this!" and "the Government is doing that!" eh. "the only thing that goes to infinity is leverage." everything else is advertising. am i saying "gold bugs just have a better media strategy"? pretty much. (absolutely superior to silver unfortunately.) but you're talking to a history major. if we speak of these things without regard to the industrial revolution you're really missing an awful lot folks. never been to this City but they say it really is amazing:
http://en.wikipedia.org/wiki/Edinburgh "and they were just Weavers!" (who became steel magnates and changed civilization as it is actually lived.) http://en.wikipedia.org/wiki/Pittsburgh and here's the gold-less chitty chitty bang bang that powered the whole revolution: https://www.google.com/search?q=steel+locomotive&rlz=1T4TSNO_enUS457US45... these companies are still around today...and should they wish could buy gold and silver mines right now for a song.

Thu, 06/27/2013 - 12:01 | 3699428 SheepDog-One
SheepDog-One's picture

Guns, ammo, booze....better than gold I think.

Thu, 06/27/2013 - 12:28 | 3699527 greatbeard
greatbeard's picture

>> Guns, ammo, booze

My stomach can no longer handle booze (good thing I got while the gettin' was good).  Lately gold has been having the same effect, tummy hurts.

Thu, 06/27/2013 - 12:39 | 3699575 Groundhog Day
Groundhog Day's picture

sheepdog-one

which booze is the best store of value in the long run...much appreciated on any input

Thu, 06/27/2013 - 12:55 | 3699655 Seasmoke
Seasmoke's picture

Bourbon

Thu, 06/27/2013 - 13:40 | 3699828 SheepDog-One
SheepDog-One's picture

I like to buy a case of Wild Turkey 101 in pint bottles once in a while.

Thu, 06/27/2013 - 14:22 | 3700070 klockwerks
klockwerks's picture

I stored a couple of cases and understand it will not go bad as long as it's not opened. I bought a case of 4 Oz water, drank it up, dried out the bottles and stored them and  that is what I will use to barter if it's ever necessary. Got 4 oz of good whiskey, how bad do you want it

Thu, 06/27/2013 - 13:45 | 3699858 Ignorance is bliss
Ignorance is bliss's picture

My favorite is Scotch. When SHTF your favorite foreign liquors will be harder to acquire due to shipping costs and acceptance of fiat outside the U.S. I am assuming we will lose our dollar reserve status.

Thu, 06/27/2013 - 12:01 | 3699429 SILVERGEDDON
SILVERGEDDON's picture

Aurophobia - is that like when i see a great set of headlights in a tight t-shirt, wearing no bra, on a cool evening, and I break out into a cold sweat ?

" I can't keep my hands in my pockets, while I'm looking at those rockets " 

I like to handle coins as well, just before the boat sinks beneath the waves - again. 

 

Thu, 06/27/2013 - 12:27 | 3699524 paddy0761
paddy0761's picture

I stopped reading after:

"After our price target of $2,000 formulated last year was clearly missed, we must engage in self-criticism."

Nobody really knows. 

Thu, 06/27/2013 - 12:33 | 3699545 Kirk2NCC1701
Kirk2NCC1701's picture

Same old, same old.

Gonna pull a Kito. Time for sanity and R+R with family. Enjoy your 160/120 BP.

One to beam up.

Thu, 06/27/2013 - 13:37 | 3699811 Shell Game
Shell Game's picture

I appreciate contrary opinions as much as the next, but with you I don't hear any opinions.  Ever.  Here's a tip:  it's a sign of low/lazy intelligence to RELY on the habit of undercutting those who have the nut sack to display their opinions.

 

What is your preferred 'sane' store of value going into the coming shit storm?  Please do opine....

Thu, 06/27/2013 - 12:34 | 3699550 bshirley1968
bshirley1968's picture

Who gives a shit if gold goes down?  If you do, then you own it for ALL THE WRONG REASONS!

I am tired of these guys who buy and have bought gold as an investment.  It is NOT an investment for you to make more fiat.  It is an asset.  If gold goes down, it MUST mean the fiat currency is stablizing and getting stronger; therefore, your fiat will be fine and will buy the things you need to operate and survive in this economy.

The problem all along in gold and silver was the sales pitch about how the dollar would collapse and pm prices would go to the moon.  What a crock.  People that believe the world is going to fall apart and they are going to sit on their little pile of gold or silver and live like a king are as stupid as a bag of rocks.  That is never going to happen.  The world fall apart and your gold and silver may give you a thin layer of insulation that others might have missed but if you don't have a bunch, you will probably run out quick buying food and necessities and if you have a ton, someone bigger and badder will just come and get it ..... like the gov......that is never going away.......to all you anarchist that is a pipe dream so go smoke a little more and be happy with that.  Governement never goes away it just comes back worse than before.  ONLY ONE TIME in history that didn't happen.....the quiz on that is tomorrow.

So if gold goes down, life will be back to normal (in theory) and if gold goes up, you will be hedged against inflation (to a degree).  There are no free rides and the only thing certain in this life is death.  Anything else and you are fooling yourself that you have more control than you actually do.

Thu, 06/27/2013 - 12:43 | 3699593 Godisanhftbot
Godisanhftbot's picture

 yep, gold pimp is a good biz to be in, no matter what happens you can claim victory.

Thu, 06/27/2013 - 13:48 | 3699870 howenlink
howenlink's picture

The world may or may not fall apart, but it seems pretty clear that the US Dollar as the World Reserve Currency is failing.  History has multiple examples of debased currencies becoming trash.  History also shows that countries do not hold world reserve status forever.

I agree that gold is not an investment in the sense that it does not generate profit.  However, as fiat fails, precious metals hold value.

What we are seeing this week is the failure of paper ETF gold and silver IMHO.

Thu, 06/27/2013 - 12:37 | 3699564 CheapBastard
CheapBastard's picture

Dear Valued Customer,

 

Your deposits are safe with us.

 

Sincerely,

Honorable Corzine, CEO, MoFo

 

cc: Jeff Skilling, CFO

Thu, 06/27/2013 - 12:52 | 3699638 robertocarlos
robertocarlos's picture

One of the lessons I took from ZH is that a safety deposit box is worthless. Never mind a bank account.

Thu, 06/27/2013 - 12:42 | 3699589 Godisanhftbot
Godisanhftbot's picture

goldOmega

Thu, 06/27/2013 - 12:47 | 3699612 Fishhawk
Fishhawk's picture

I'm with you greatbeard; putting up zucchini/onion/bacon mix with my crop.  Excess rains have hurt the tomatoes setting fruit, but driving the peppers' vegetative growth.  Where abouts is your farm?

Thu, 06/27/2013 - 13:19 | 3699752 greatbeard
greatbeard's picture

>> Excess rains have hurt the tomatoes setting fruit,

I hear once the plants start blooming you have to cut down on the nitrogen.  I use a liquid fertilizer I get mail order from Texas, Texas Tomato Food.  The only problem is finding a time that it's dry enough to need to water/feed them. 

My biggest problem is the wetness has hammered the squash and cucumbers.   One of those lessons I'm learning this year, plant as early as possible to get ahead of the rainy season.

I'm in North Central Florida.  You?

Thu, 06/27/2013 - 13:59 | 3699926 jimmytorpedo
jimmytorpedo's picture

My tomatoes in Southern Ontario, Canada have just started flowering.

So much rain we haven't cut any hay yet.

Last year we did all 140 acres of hay in 2.5 weeks.

10 000 small squares and the rest got rolled up for the cows.

All the neighbours have mouldy windrows of hay rotting in the field.

Going to start harvesting fava beans and some broccoli and garlic scapes soon.

Thu, 06/27/2013 - 12:50 | 3699627 robertocarlos
robertocarlos's picture

I don't believe in insurance. I have house and car insurance because I am forced to buy them. I don't have life insurance and I don't need medical insurance.

Thu, 06/27/2013 - 12:51 | 3699631 lakecity55
lakecity55's picture

stuff goes up, then goes down.

stuff goes down, then goes up.

just hold on to your stuff.

Thu, 06/27/2013 - 12:58 | 3699671 The Invisible Foot
The Invisible Foot's picture

Food thats what I buy.

Thu, 06/27/2013 - 13:01 | 3699681 Hannibal
Hannibal's picture
Billionaires Dumping Stocks, Economist Knows Why...

Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast.

http://www.moneynews.com/Outbrain/billionaires-dump-economist-stock/2012...

"ForeWarned IS ForeArmed!"

Thu, 06/27/2013 - 13:06 | 3699702 bshirley1968
bshirley1968's picture

Most of you here wouldn't care that the price has fallen except you have been bragging to all your buddies about the money you were "making" on your gold investment when it was going up.

Otherwise, what you going to do with the money anyway, put it is the stock market?  If you would, then you don't need to own gold in the first place.  Maybe you would take the money and put it in a mattress.  What would be the fun in that?  MONEY was made to spend.  What better thing to spend extra money on than gold and silver?  You could go buy some more plastic at Walmart (which by the pound is way more expensive) that will be in the land fill in about 6 months tops.  You could go buy a new car that you will lose 30% on when you pull out the drive.  Maybe a new $2400 lawn mower, that will cost will be worth $800 by the end of the summer if you take good care of it.

Outside of land, guns, or gold/silver, there is not much you can buy today that won't take 30% off the top right after the purchase.  Money itself is loosing value everyday it just sits there.  So gold goes down a little (in the terms of some wishy-washy fiat currency), you are never the "fool" for buying a little gold no matter the "price".

Let your pride take a little beating and move on.  There is a hell of a lot of CRAP out there on which to spend your "hard earned dollars".

Thu, 06/27/2013 - 13:34 | 3699800 dolph9
dolph9's picture

I agree.  Entropy at work.  Unless you are constantly making more and more money, you will lose to it.  Money loses value as does anything you buy with it.

That's where gold comes in.  With gold, all you lose are the premiums and carry cost.

"Whoever loses least wins"

Learn this well.

Thu, 06/27/2013 - 13:08 | 3699708 BurningBetty
BurningBetty's picture

I am a silverbug with my nice silver stack...but, this gold chart doesn't imply buying lol:

https://www.goldsource.no/sites/default/files/bobbleiii.png 

Thu, 06/27/2013 - 13:35 | 3699802 Meat Hammer
Meat Hammer's picture

CNBS can't stop talking about the shiny today!  WTF?

Thu, 06/27/2013 - 13:47 | 3699864 unwashedmass
unwashedmass's picture

tomorrow is the first delivery day....JPM doesn't have the gold to deliver if they get even a minimal number standing. in other words, they are fucked. 

 

so....ram it down, and hope to god you scare some of the bugs into selling and some of the contract holders to rethink demanding delivery. 

Thu, 06/27/2013 - 13:37 | 3699816 alfbell
alfbell's picture

 

 

Martin Armstrong on gold. Makes sense. I'm reading him more now as I think he has a much better grasp on things due to his global viewpoint.

 To make a bull market, whatever you are looking at must rise in terms of all currencies. As the dollar rises, gold will fall in dollar terms, however, it will rise in terms of euros, yen, $A etc. The bull market never unfolds simultaneously. Gold did not exceed the 1980 adjusted for inflation which stands at $2300. Silver did not exceed the 1980 in the cash market. So in dollar terms, the hype was loud, but there was no place to go.

The dollar bears only see the US must collapse. Walk out on the street and ask people if they think the dollar will collapse. They will look at you like you are crazy. They are spending money. Enjoying the summer. Having a very good time. The rise in the dollar is NECESSARY to turn the US economy down. That is why they formed the G5 in 1985 because of the high dollar that dropped exports. Politicians see that as costing jobs.

Physical gold is for the individual investor. Big money cannot and would not park there – they need regular income. Plus the gold market is a tiny fraction of the financial markets. Big money moves in and out on a phone call. They cannot be bothered with buying bricks of gold, storing them, shipping them, insuring them all for no cash flow.

Whatever your native language, if you encounter someone from a foreign land, it does not make them an idiot because they cannot speak your language. Finance is the same. You judge the world based upon your beliefs – that is what is true in your world. To someone else, their world is different. To each his own.

We ALL act in our own self-interest. If gold rises in dollars doubling in price but the dollar fall by 50% against the Euro, to a European gold is unchanged. We all respond to the currency base in our mind like language. Until we ALL see gold rising in ALL currencies, there will not be a sustainable bull market.

It is coming. Just be patient.

Thu, 06/27/2013 - 13:52 | 3699875 Shell Game
Shell Game's picture

Armstrong has some of the most cogent arguments against monetary metals.  But his huge error - aside from asking 'the [deer] in the streets about a dollar collapse  {lmfao, really?} - is to think big money has not been hoarding, and is not continuing to hoard, monetary metal as disaster insurance (disaster = monetary paradigm shift).

It sure the hell is not the deer in the streets who cause monetary paradigm shifts. It is the capital giants and flow of good money away from bad.  Armstrong ignores the fact that this will not be a choice, there will be no vote, that this is not about investments or bull markets.  This is a very typical trap and misunderstanding.  Ultimately, Armstrong will be proven wrong.

 

p.s. thanks for bolding the entire text, it made it much more potent.....

Thu, 06/27/2013 - 15:26 | 3700462 alfbell
alfbell's picture

 

I thought it was when the people in the streets (the deer) lose confidence in the currency that the pendulum starts swinging to the other side. The velocity of money picks up and inflation picks up. No one wants to hold the money any more... they want to get rid of it as soon as possible, buy tangible assets with it, buy food, do everything to stay out of cash... and this is what really gets the high inflation going. It is all sentiment. As long as the people are confident about the currency they use (can buy whatever they need with it, it's the only form of money they can pay their taxes with, etc.) there won't be high inflation, only the creeping inflation that we've had over the decades. The capital giants determine where the safest harbor is and will go wherever the rule of law and investments are for protection and profit. They can make and break countries or economic systems. The electronic herd.

Thu, 06/27/2013 - 13:38 | 3699821 joego1
joego1's picture

I had to buy my insurance premium on the treasury debt. 175 silver maples. Its hard to cover all those trillons Sam needs to monitor everyone.

Thu, 06/27/2013 - 13:47 | 3699863 robertocarlos
robertocarlos's picture

That's $25 X 175. I can't do the math without a solar powered calculator but that's more  than most people have in the bank.

Thu, 06/27/2013 - 13:48 | 3699868 Godisanhftbot
Godisanhftbot's picture

lets see what the true believers have to say at 500

Thu, 06/27/2013 - 13:49 | 3699872 ebworthen
ebworthen's picture

Excellent article; the full download is worth the read.

Thu, 06/27/2013 - 14:00 | 3699928 Levadiakos
Levadiakos's picture

2) Inflation, according to the Fed’s own statistics is running close to a 1% pace. The Fed has told us that they “target,” “ target” 2% and for the next 1–2 years are willing to accept even 2½% until they reverse engines. Fed Governor Bullard of the St. Louis Fed was in our opinion correct where he dissented from the majority decision several weeks ago, citing the distant shores of 2%+ inflation and the seeming inability to even move in that direction.

              ---Bill Gross 

Thu, 06/27/2013 - 14:03 | 3699943 unwashedmass
unwashedmass's picture

 

here's a question.....now watching GLD, and the comex bullion price...and KNOWING (yes, some of read, JPM) that shares can be redeemed for bullion....

assuming JPM even bothers with the niceties of purchasing shares after manipulating the price to the basement....

do we suppose that JPM is actually going to replace (and I use "replace" with some incredulity cause we don't know if there actually ever was actual gold in GLD)....

is JPM going to replace what was taken.........so that GLD actually becomes a legitimate ETF? Or is it just going to be a paper castle that collapses in lawsuits when it is "discovered" it holds no gold? 

 

Thu, 06/27/2013 - 14:05 | 3699958 bill1102inf
bill1102inf's picture

$1199 on the way to 500

Thu, 06/27/2013 - 14:11 | 3700002 lasvegaspersona
lasvegaspersona's picture

where to begin: first...

gold's high stock-to-flow ratio is precisely what gives it its importance as a monetary asset (and is a major reason why it was chosen as money, i.e., the general medium of exchange, in times past, before governments imposed fiat money)

gold as a MoE sucks, it is heavy and can't be immediately transferred long distances...fiat can...fiat is the best MoE

 

Why do all the 'great' gold analyst confuse gold with its derivatives?

Gold derviatives are tanking, gold remains bid....for now they are priced by the same mechanism and this confuses those who own gold but are unsure why they own it.

Soon there will occur events after which this last point will be clarified...gold is the best Store of 
Value and it works great during periods of  great change in the monetary system.

There is an entire cottage industry telling us the dollar is toast, yet most of them recommend investing for the period we are in instead of for the period that is coming. Buy and hold physical gold and don't sweat the paper stuff,....unless it is paper you crave...

Thu, 06/27/2013 - 14:25 | 3700092 bshirley1968
bshirley1968's picture

I really loath talking about gold in "market" terms.  One of the reasons I bought gold was to get my money (value) out of the "markets".  I hate frickin charts and tech prophecies that are self-fulfilling.

Anyone thought about this?  How do you maintain a bubble?

If I were the fed and needed to blow a fiat bubble to "maintain" a ponzi, keep the music playing, etc.  All you have to do to keep the bubble from popping is have a "relief valve".  In this case, a relief valve would simply be the destruction of fiat.  As more fiat is pumped in on one side, we destroy it and let it out on the other side.

Money destruction is something most people don't think about because to them it is unthinkable.  To the fed that prints the trashy shit, destroying it is no big deal because they can print more so easily.  The key is to destroy the money of the right people.  You know, your enemies.  The banks, TBTF, will always have money to buy deflated assets classes whether they are stocks, bonds, land, commodities, etc.  The fed can destroy the banks money and just give them more.  You and I on the other hand don't get the fed hand out.  If they drive down the price of gold with their paper and we bail, then they have destroyed our value with their paper and we most likely won't get it back.  That is why buying and holding an asset like gold, silver, etc. is sooooooo important.  It is the only thing that has a snow ball's chance of withstanding the onslaught of the fed's attacks of money destruction.

Another thing, maybe they can hold off runaway inflation by destroying as much money as they print.  Or maybe they only destroy 80% of what they print and prices rise slower.  The whole time though, the banks get a reset of more money and when the average person has to bail on an asset (for whatever reason) the bank is there to scoop it up.  Major wealth transfer........but not at my house.

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