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The Golden (Sentiment) Rule: If It Isn’t Off The Chart Now, It Soon Will Be
Remember: what is unsustainable, can never crash, or so those who can create virtually unlimited naked shorts out of thin air would like everyone to believe.
Gross exposure - new all time record shorts:
Net: lowest longs in a decade:
Comex Registered gold inventory: decade lows:
Total Comex gold inventory: lowest since 2008:
Two final ones, but without the charts:
JPMorgan total gold vault holdings: record low.
Bundesbank gold repatriation: ongoing.
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Hey Sudden, you are forgetting something. The wheels are coming off faster than you think and the sheeples will wake up a lot quicker than years. Many I talk to now are just starting to get it. I think we may languish for a while but just till after summer.
And it sure is lonely here at the bottom of that green chart. Somehow I think that will change. And soon.
I hope you're right.
I know we're right.
But man... I've heard "you think to dark" already 4 times this month from different people. And now I've lost a huhe amount on my PM's... bigtime like 250k on the pricedrop alone. That's a shitload of money for me.From a 32$ average down to 19$ is a fucking insane loss for me. This month is the most depressing month for me since ever...
Sudden debt if I were to look at my cost basis I probably add up to a number that would make me cringe. But in my case I have come to a different conclusion. I am going to work right up till I drop dead, if I am lucky. The concept of retirement is a fantasy. So I worry less and less about that nest egg for retirement. Ask anyone over here who retired at 65 wothout a pension how zirp is working out for them. They are realizing they are going to come up a bit short at the worst possible time in their lives.
Keep something in mind. If they end QE tomorrow everything goes to shit in a nanosecond. If they continue it wverything goes to shit the day the fed buys one too many treasuries, and most likely before when something sets off a collateral cascade. When the dust settles you will probably find yourself in an enviable position. A bit too enviable maybe.
They want money!!!
http://www.youtube.com/watch?v=3_iQZiVD_zA
Jesus Christ, this really is 'Cheers with a Bloomberg Terminal' now...
~~~
What?... Now I guess everyone comes around to have a beer and whine about losses [which aren't really losses because they're un booked]...
Sorry for the lack of compassion, but 'get a grip'... If somebody is gonna get emotional about money they shouldn't be in the game... If you still like your idea, hold on to your stash, if not, SELL... It's as simple as that... No use whining about it...
Kids in Detroit have it tough, but everyone is supposed to feel sorry for you because you're sitting on a mountain of physical gold & silver, & have a decent job?...
some pros and cons. gold is an optimist play. if the wheels stay on train wreck america, you'll have a shot at that waterfront piece on nantucket. that said, i've made two offers for real estate for gold in the past three years. both rejected. then i tried to leverage my stack with the local bank. the manager pressed the independant thought button and i started getting brochures from fema camps. and how does your local farmer manage to break a kruggerand for that dozen eggs and pint of strawberries? then again, bitcoin takes gold and so will a border guard. so overall, i've got "three knuckles" working.
gold as legal tender will change. "Bank of North Dakota" and Texas. We'll see about Alberta and British Colimbia as well (big enough to be countries if they wish.) the USA and Canada still have the largest undefended border in the world. "let that be a lesson to ya" SD et al. this is still a market. these things can change too. the Russians built the trans Siberian railroad. the Americans the interstate highway system. the Chinese have just launched a rocket into space for their own space station program. the only thing we can say for certain is that as prices for gold and silver fall so all other prices must follow. "too much repression." eventually there will be a Declaration of Independence.
Correct
The time period that gold hovers below its cost of production is the pulling of a bow that will shoot gold upwards when finally released. How long can the bow remain taught ? What happens when certain countries decide they want to load up ?
dup
I know this sounds trite and naive, but in the case of actual physical metal that you hold, it's really more a matter of patience than anything. I think of physical metal as long term savings, so when the price goes down I actually am happy because it means I can add more, and always because I know that the worst thing that happens is I pass it on to future generations. Of course when they go down, I'm simultaneously cursing the rapid evaporation of the money I have tied up in the miners... which sadly can go to 0 (although today was a fairly convincing reversal day).
Agreed, and me too. I figure if the prices drop enough that I don't want to trade, then I could always have someone fabricate jewelry or cast a sculpture... and hand it down to future generations. I too have 15% of my money in some miners, and they've been bad performers since I got in a few years back. But I think long term the price of metal will go up and the miners will benefit, and I can then get out if I fee like it.
Like you, I have a lot of paper losses in both silver and gold bullion. Fortunately for me.(sarcasm), I was victimized in a ponzi scheme and lost over $150K just like that. Boom...gone. How many of those fraudulent Fucks that have committed fraud against Joe Six have been put behind bars? MF global, robo fraud, foreclosure fraud, money laundering, fraudulent accounting, Cypress monetary theft, Ireland's bankers, Libor rigging, etc. My point is that fraud is rampant and everywhere. You can't invest because the corruption has eaten at the system core. There is nothing left to invest in. Gold and Silver are demonized because they can stand the light of reason. I also have a lot of family in Venezuela. Their savings have turned to dust overnight due to currency devaluations. They can only dream of hoarding precious metals. Too late for them. They will suffer long into the future.
Exactly. It may take a very long time to pile up a gigantic mountain of paper, but it all burns in minutes:
http://www.youtube.com/watch?v=qMkkfuSizc4
SD, if it helps;
I don't mark my PM's to market. I'll do that when I see the Marble Orchard dead ahead. My heirs can use it to finance my Wake.
You know the differences between an (Irish) wedding and a wake?
There's one less drunk at the wake and then the drinks are on him.
I feel your pain SD I really do. We all have taken a loss as well but nothing has changed since 2008 except more manipulation, 0 prosecutions, Less regulations and ridiculously small fines for any financial crimes. The list goes on and on and I see people catching on all around me, however it is slow but it is happening and will continue to spread.
I am just so devastated that I visited a coin shop today. I matched my 9 year old daughter's piggy bank and she walked away 4 nice silver ounces to add to as she grows up. The jig is up and the media has the masses fooled beyond belief but that is just 325 million people out of almost 7 billion who aren't fooled one bit by the Great Satan's Media Machine".
Stay the course proudly my friend our day will come and relatively soon I believe.
SD--You don't need to hear anything from me, but since you mention it...You haven't lost any money at all until you sell and lock in the price in fiat. I don't think anybody thinks PM prices are staying here for too long. And the other reason we bought PMs is that we can conceive of a time, not too far in the future either (though, frustratingly, we don't know when) when the price of PMs in Fiat is a meaningless and absurd concept, us not being able to divide by zero 'n shit. Nerve-wracking? As hell, friend.
You're not thinking dark enough, brother.
Feel better?
Ha. No shit. People just are envious that he's actually been thinking.
"This month is the most depressing month for me since ever"
I won't not worry about. Consider that back in 2009 the S&P was at 666. Its more than doubled since then. Like everything else it will bounce, it's just not going to bounce back tommorow, or next month. There are no solutions out of the debt crisis, and the Central banks are only digging the hole much deeper. It will turn around. Nothing else besides PMs dropped. Oil is still at $95, food prices are still high, stocks are still near their highs, and ever bonds remain in bubble territory. It make no sense for PMs to drop while everything else held strong. Keep a cool head and avoid the panic.
You have to look at your judgement, honestly where can you go for any value? Stay putSD and take a break this could be a turn.
Ignore it. It got cut in half in 2008. fix your psychology. switch to decaf.
If people agreed with you; then you'd be in trouble. The masses are always fucked.
"And now I've lost a huhe amount on my PM's..."
Actually, you've lost nothing - unless you sold some. Until you sell your PM's at a lower price than what you purchased them for, you haven't realized a loss.
If it makes you feel better, then when you look at your stash, consider it "Marked To Maturity" rather than mark to market!
I do not care about gold dropping to 1,200 or less... I am still buying when able.
Many people who know that I have been a gold buyer for a long time, are trying to make fun of me. They seem to enjoy the schadenfreude... For that reason alone, I really hope the other markets blow up soon.
That's a hell of a thing to want, in light of the fact that "many people know" you have gold. Might want to put it on the wire that you decided to go with the shorts and have come to your senses and that you are putting the proceeds in a money market for safe keeping.
Or tell them the fucking bass boat sank with all the shiny with it and you're going on welfare and food stamps.
Or move and sin no more.
A smart man, name of Dobbs I believe, once said: "act like a dumbshit and they will treat you like an equal."
Why do you care if they laugh? Roll with you instincts and wait for the day when you get to laugh.
My wife doesn't even know we have gold, silver and a metric shit ton of lead., and that's been a tough caper to pull off, but she'll be loving my sneaky ass even more real soon. I'm done with explaining my motivations. If self preservation ain't enough for people to understand, fuck em. Im not a missionary and I'm rolling with the plan, as stated. If my cat saw me loading it in the safe, I'd choke the fucker in a heartbeat or at least blind him and snatch out his vocal cords.
>>....in light of the fact that "many people know" you have gold. Might want to put it on the wire that you decided to go with the shorts and have come to your senses and that you are putting the proceeds in a money market for safe keeping.
FWIW I heartily endorse this concept. You have seen the light, taken a bath, and turned over a new leaf; and if all that wasn't enough, you liquidated ALL your PM holdings, and will never own that shit again. That's what I did, fer sure.
+1 - I was totally with you until you admitted to having a cat.
Maybe it's your ignorant wife's ... but then the choking/muting part may be deleterious to your previously sneaky ass.
I'm sure though you also have a cover story that contingency.
Cat (kitten then) was found shaking and starving next to a dumpster in an alley Brooklyn when my old lady was in her residency living there. I thought it was a wet rat at first.
Cleaned the dumbshit up...got him current on his meds...and what do you know...full blood Russian blue. He's a fine looking cat, no doubt. Not real smart though. they say it skips a generation. Wasn't a pet person, but he grew on me and I couldn't give him away, what with a grand worth of shots and med bills. I guess I'm a cat person.
Gold and silver are going to get smacked around for years to come. You knew this was a losing battle getting in to it. Remember, gold is INSURANCE. Think of it in that light and get the whole get rich quick scheme thing out of your head.
If you want to invest, go for limited partnerships, income producing assets, food production etc. THINGS THAT MATTER. Gold isnt there to flip.
FFS
so how do you explain the exploding monetary base since 2009, when the COMEX spot price for PMs were last as low as it is today?
The point of my post was not to explain the reasons to own gold. My point was that gold is not that kind of asset. It is insurance, pure and plain. If you own a farm, are your returns not better than gold right now? How about if gold triples in price, I still think that oil and food would be important, no?
I dont trust vault figures that could be manipulated, but what I do know is that silver is, to me, a worthless asset. It is a poor inflation hedge as mike gundlach incorrectly points out despite its beta, and serves no purpose other than to trade up to gold when the ratio compresses.
Sorry silver people, but it will never be gold. Try running with 10k in silver and youll change your mind real fast.
I never run with silver. I drive. Sometimes I fly with it. I often go boating with it.
"Silver will never be gold". True, that. Silver has over 10,000 industrial applications, and there are no substitutes in some of them. Countless tons are used in the petroleum cracking process alone. Gold is very pretty, but it doesn't kill germs. It is not the most reflective or conductive element, either. Even at $1200, it's too expensive to use as a catalyst or to back a mirror with.
I suggest you have some of each. Keep them secret; keep them safe. Don't run with them.
Oh, one other thing. The Silver Institute calculated two years ago that industrial demand alone would consume all of mined silver by 2015, leaving none for investment demand. And that was before the copper slump shut in much of the mining that produced silver as a by-product.
"Countless tons [of silver] are used in the petroleum cracking process alone. "
I don't think so. Platinum is the catalyst used in oil cracking. I believe Silver is using in some processes such as the production of formaldehyde and probably few other petrochemical productions. Platinum and Palliadium are used in exhaust catalytic converters.
http://en.wikipedia.org/wiki/Catalytic_reforming
"The Silver Institute calculated two years ago that industrial demand alone would consume all of mined silver by 2015'
Not sure if that is true. They may have said it, but I have my doubts supplies will be exhausted by 2015. As price goes up, demand falls and production increases.
Most Mirrors use Aluminium not silver for the reflective coating, since its cheaper, requires a lot less energy to Sputter onto glass, and does not tarnish like silver does.
http://en.wikipedia.org/wiki/Mirror
Silver makes sense as a bartering metal since its a lot less valuable than gold, and Platium. It make more sense to buy a bag of grocies using a few silver coins than a gold coin. It make great insurance policy against fiat currencies, but its not really a good investiment commodity in my opinion.
Like you, I don't know whether the Silver Institute will be proven correct. They were just projecting forward the current growth rate of industrial consumption vs. mined supply. If the economy craters, industrial demand will fall short of those projections, no doubt.
I wasn't referring to catalytic converters, but to silver's use as an accelerant in chemical reactions: "Silver's catalytic properties make it ideal for use as a catalyst in oxidation reactions, for example, the production of formaldehyde from methanol and air by means of silver screens or crystallites...silver is probably the only catalyst available today to convert ethylene to ethylene oxide (used for making polyesters)— an important industrial reaction" (wikipedia)
One correction: silver production is relatively inelastic to price, because the bulk of output is still as a byproduct of copper, zinc and nickel production. A bad economy means less demand for copper, etc. Less base metal refining means less silver supply.
"One correction: silver production is relatively inelastic to price, because the bulk of output is still as a byproduct of copper, zinc and nickel production. A bad economy means less demand for copper, etc. Less base metal refining means less silver supply."
If demand for other metals is down because of a recession, demand for silver will also be down. PM's will only buck that trend if the public fears the value of thier currency.
"PM's will only buck that trend if the public fears the value of thier currency."
Sounds good in theory, but there's a problem with that concept: If precious metals prices only rise when the public fear that the currency is collapsing in value, how do you explain the huge rise in both gold and silver prices from 2000-2008? Through recession and expansion, bubbles bursting, new bubbles forming, stocks falling, stocks rising then falling again, gold and silver tripled and quadrupled in price, respectively.
It can't be that simple; gold and silver are historically money, but they're also jewelry. Gold has few industrial uses, silver has many. They are in the process of remonetization. It's conceivable that silver might outperform gold in the future, if the economy recovers, industrial demand picks up and inflation fears subside (not too likely). It's also conceivable that the relative valuations will return to historical rates. For much of monetary history, the gold price was roughly 16 times the silver price, which is the same as the relative distribution of the two metals in the earth's crust. Not that it proves or guarantees anything.
This is the bottom line, why I think the whole collapse is either a great example in idiot herd behavior, or more likely the herd being driven in a particular direction (over a cliff in this case). I think anybody who wants to make a convincing case for a sustained bear market in gold needs to explain
a) why the correlation between POG and this chart suddenly broke or
b) when and how the money supply is suddenly going to drop by around 1.2 trillion to get back in line with the current price of gold
http://research.stlouisfed.org/fred2/series/BASE
I can answer to both questions.
It has to go down in price or its all over.
No, you can't just say 'it has to' you have to explain how and why that's going to happen, in a global market, where there's a choice about whether or not they want to be buying shitty USTs backing a debt that already exceeds 100% of GDP.
Your demand for an "explanation" reveals some insecurity on your part. Some things don't need explaining, they just are what they are. Enough exposure to the precious metals life-style reveals subtle learning curves and an understanding that does not need reinforcement. A mellow state of mind sets in that just lets the trollish comments roll off without a feather ruffled. They say that an "average" IQ is 100, but what they don't tell you is that the criteria for rating 100 has dropped dramatically over the last century. So it is with education. An 8th grade education in 1920 was well above the knowledge level of today's 4-year college degree. It's not how you know what you know, or how it is "explained", but simply if you know enough for your needs.
Or what's all over? I assume you mean the world-wide paper trading scheme that syphons wealth from anyone who's not in the paper trading cliques. Gosh, that would be a shame.
Yup, that is right, just like they have got smacked around the last 10 years. Ummm, thanks.
Same here Sudden. Losses have been terrible for me this year and part of last. But as you know, when the last bull leaves the bar, the new crowd shows up and a new bull is born. But they did not get this old bull off the train. By this time next year you and I will be singing a much better tune. Hang in there with me.
Although if this shit in this country keeps up I may ask you for a couple of ideas up North. lol.
It has been ugly though. A lot of ground to make up.
None of us look at this as get rich quick. A long slow process that will pay off and protect us. We do not flip our gold. Lets see who is at the finish line when this is over.
I don't know about you boys but those fucking foxes have been getting into our henhouses lately and it's really starting to piss me off. I mean, REALLY piss me off.
The 'Barn-Yard' cocks on CNBS are long xau, and miners. What could go wrong? I'm renting a Clydesdale this weekend, to haul my 'hollowed out' telephone pole to the local swamp.
What gets me the most is the discussion in the media about "gold" being sold off. If they had card tables set up and were selling stacks of shiny Eagles, I'd be worried. (I'd also be in line eager to grab a few at bargain basement prices.) As long as they are burning paper ETF holdings I could care less. There are 2 kinds of "gold" and one of them is a shoddy counterfeit. Look again at the first chart in this article. Does anyone here think they were selling GOLD?
Ok here is an easier version. It is a conspiracy against the white male.
There that was pretty fucking easy to say. It must not be true but blind sighted generalizations of the obvious.
Central banks sell record sums of US debt
http://www.ft.com/intl/cms/s/0/cdc2d99e-dfa6-11e2-881f-00144feab7de.html
To the people down voting my comments about silver, can you explain why you think there is more upside to silver than gold in a world where more silver is found than ever thought possible due to advances in mining?
Crickets.....
Been finding much gold lately? How much is it to extract it vs the cost of silver?
More crickets....
I didn't junk you, FWIW... I personally like silver because it provides a middle class 'Joe Sixpack' guy like myself a 65x multiplier when compared to Gold (Bitchez). I own 100x more silver than gold, I'm 32 years old... Look me up in 2043 and ask me how I did on my silver investment, because until then it doesn't matter. Good evening to you, sir.
i like junk silver that is accepted as legal tender or that which is a discontinued national currency that can be coverted into de facto currency.
2013 mining numbers show 10.5 oz of Ag for every 1 oz of Au produced. The price, however is like 65 to 1. Therefore it's not unreasonable to believe that silver will fair well going forward.
One tomahawk missle requires 500 oz of silver. But no gold.
That can't be right, 500 oz? Citation please. More like 500 mg, maybe.
Also, despite advances in drilling, oil remains at 90 +/- 5 per barrel.
I also did not down vote you.
Ask Mike Maloney.
I junked you because you're either a shill or a moron. What advances in mining? If there were advances in mining it wouldn't come out of the ground at a 10 to 1 ratio to gold, there would be many more primary silver mines, and the mining companies would be making profits rather than going bankrupt. Go get an education or ask your handlers for better troll training.
Rudeness aside let's talk about the facts. In the past as Tyler has shown eloquently in a chart here, the ratio of silver to gold used to be a lot closer. You have to go way back and you will see that silver for thousands of years was golds cousin. The fact is that industries which mine, often find silver as a byproduct. The advances in mining of which I speak of are clear and obvious, but you want to point to a demand picture of industrial uses. Do you think that tomahawk missiles will use 500 oz of silver in production ten years from now? Probably. Do you think backing mirrors will happen if silver is 250 an oz? No. Substitution will occur at high prices, not to mention a fall in demand. Gold is not 1200 an oz because of adoption rates in the us being low and silver is not 20 bucks because of industrial demand falling. Its because the people that make the rules say it is. The wheels fall off at high prices.
Gold doesn't suffer the same ills that silver does. Gold is much rarer than silver and will always be much rarer. Hence its choice as physical metal de jour.
As for the Joe six pack argument, if you can only afford a few oz of silver a month, perhaps you should take that money and start a small farm. It will pay for itself while metals will fall. The idea is the same in investing with gold silver or farmland except the farmer will win out in the long run.
Wow, you have written enough already for this decade. Go back to school.
Beep, Beep, Beep. Back up the truck at 1100 +/- 25
/:)
https://www.youtube.com/watch?v=B_H7WZGsIjM
I just placed my usual monthly order - and saved enough to get my wife a Glock. These prices aren't all bad.
It's a shame that you couldn't find any bullets to go with that Glock.
At the gun show I attended last week there was plenty of ammo for everything and prices are dropping, albeit slowly.
Good to know Blano TY.
I keep funds set aside for ammo and reloading components. When they pop up I buy all I can. The supply is sporadic, but between my local shop and Midway I've been able to get ahold of what I needed. Seems to be getting a bit better lately.
"between my local shop and Midway I've been able to get ahold of what I needed"
Have you noticed how the popular sized bullets are always on backorder? Even a two-hour drive to Cabela's didn't render much for the reloading bench. Who in the heck has been buyin' up all of the IMR-4895?
Trooper, 508th Parachute Infantry! Cool, I spent some time with the 505th PIR. I picked up Glock 19's for each of my kids, it's like gold to my family. The Ranger recon detachments are using G19's so you are in excellent company.
Nice, Gewehrsmann! I've really warmed up to my G23, which my wife loves to shoot with the drop-in 9mm conversion. Still like my 1911 and XDM in .45, though. Good men make sure their family can defend themselves.
Gold up 2% AUD down 2% ...4% increase in Gold in AUD
Kina. I got a little long thing going on Aussie , late in N.Y... ;-) The (msm) world seems to be in love with the usd.
Even if the $ continues to strengthen, equities will suffer more, through exchange rates. If the $ weakens, that is a net plus for commodity currencies. The $ is overbought again, and bonds are starting to show it. T-10s were higher in yield today, after being pummeled.
win-win scenario.
Gold doesn't make money. That is not its purpose. Gold is an alternative to Fiat. If Fiat collapses (it always does) then other things become currency (barter/food/energy and PM's). The most portable and universally recognised alternative currency is PM's. Don't buy gold to make money and don't sell gold because the markets tell you it has lost money. It is possible and likely that Gold could have an infinite dollar value (Fiat Collapse) but is not possible for Gold to be worth Zero dollars (unless we get hit buy a solid Gold 1 zillion ton asteroid).
An astroid? Zillion Tons? Damn, gonna need a waaay bigger truck!
The Golden Rule sucks with sadists.
Big bounce up today in gold.
http://bullandbearmash.com/chart/spot-gold-daily-bottoms-and-closes-up-o...
We need to see some follow through in the next few days - likely a change in trend.
All these ASSHOLE banks were sending me 0% interest rate Credit Cards / Checks for 18 to 24 months - JPM, Barclays, Citi, BOA for the past 2 years. Jim Rogers mentioned in several videos that there is a high probability of a correction and I had Silver and GOLD written on each of these checks stored in my drawer.
Loaded up on 1 KG of AU with their printed $. If the price goes down, will buy more with FIAT cash savings.
Fuck you BEN, DUDLEY, BLANKFEIN, BLYTHE MASTERS, Pandit, DIMON, Krugman. If something cannot go on forever, it will stop.
GOLD IS INSURANCE. Now shut up and stack.
when the people do not own precious metals they own nothing in the
eyes of the owners of the system of law and property, whatever that
is and whoever they are/ . it goes to words. who owns the word/s?
in steps precious metals, then law and land ..etc ...
I do not claim to understand it, I am just an observer.
the trick in life is to have or be able to produce something
that many other people either desire, need or love. there the
trick in the eternal circus. good luck!
.
Tom Waits - Live Circus
http://www.youtube.com/watch?v=ItnavmuF9e0
.
did he say "leave the bum" ?
yup.
Side note, I find it odd that the GLD ETF has, in the face of the waterfall crash in gold over the past several days, been flat on inventory at 969.5 tons. They picked an odd time to get lax in updating the website.
we need to keep a close eye on total outflows from GLD ETF and compare it to line 14 [monetary gold] in future Fed balance sheet reports [pdf:see page 24]
My thoughts on silver, equities, bonds, and Bernanke:
Today's move in silver and gold is what you'd expect of a bottom. If it acts like previous bottoms it should move sideways and upward for a week or two and then do one more final move down to either run the stops or prominently put in a supported backtest with flashing lights that says "this downleg is OV-AH". I have a small position and I'll look to add on dips but I will lighten if we approach the FOMC breakdown, or the $22 level quickly just in case we get that voilent down move for the backtest. It could happen at anytime or not at all, but this would be a significant turning point and they tend to do that. Just something to keep in mind. The COT report today shows the Large Specs in silver down to a measly 1,000 Net long contracts and that's not including the last three days. Since the Commercials never get net long, this is the most bullish COT positioning in a long time. Plus, this is the area of the QE2 breakout. Plus, the current price went below production costs. That's a lot of green lights lining up. IF we get that backtest and blast off, my first target will be the gap around $25.50. And while I think we could easily take a second leg up to the $34 area, you have to remember the Commercials have made this market their bitch. If they want to sit at that gap like a black hole and absorb every long contract the world can throw at them, they can. I'll deal with that as it comes, but I would expect a multi-dollar pullback there. IF this happens in the first place.
As for equities, I'm flip-flopping full-circle again. And I'm pissed off about it. Yes, I played the breakdown from FOMC and yes I do what I usually do and take half off after a big washout (which worked out this time), but I let the other half (stupidly) ride all the way back up to the 20/50-day, watching those unrealized profits going POOF in the hot air of a parade of Fed governors and Draghi backtracking for Bernanke, who ironically made a more transparent Fed yet is apparently incompetent at communicating his intended message so it's more like a smoke screen or the ink of an octopus than it is transparent. Technically, we never closed above the 50-day so I still have that second half short but if we get even a whiff of strength early in the week I'm taking it off and moving on because fuck equities, that's why. I have more important things to focus on like silver. If I played it smartly, I would have taken it all off the moment the first Fed governor backed up the Hilsenbacktrack, then I could have gone short again at the 50-day. Hindsight is 20/20. If anyone had any doubt about the fact that fundamentals mean nothing and the Fed means everything, just look at the price action of the last 10 days. Trading is hard enough, the least Bernanke can do is tell us what he's going to do so we can trade on it. If the markets are getting overextended, maybe he should think about how idiotic his policy is instead of trying to cool it off with manipulation tactics or sheer incompetence. So I'm back to not having any idea what he's going to do or where the market goes from here. But unless a limit is being imposed upon him, I expect the printing to continue, especially in light of the market reaction to tapering, which I suspect scared the Bejesus out of the Bernank.
Bonds are dead. They will forever be dead. There is no hope for bonds. Why? Because they are debt and debt has no future. Could they rally and hold 2% yield for months or even a couple years still? Sure, why not. Could the Fed prolong this mess another couple of years if they wanted to? Probably. But, Mr Hypothetically Long Bonds Guy, to clarify your "safe" strategy, your plan is to reach for 2% yield when you just witnessed a glimpse into the non-Fed backed future, and your counting on your CDS hedges to bail you out when the bond apocolypse happens? Good luck with that. If the market loses confidence in US bonds, I have three words for you: counterparty risk; and...collateral. I'm no wizard at numbers, but there's seems to be a math problem there.
Here's what I think is going to happen. Bernanke will continue this circus for as long as the market allows him to, or until the Fed actually reaches its political or practical limits, at which point the deflationary forces he's been fighting will finally crush the finanical system. The US will be on the verge of default as the whole world is in chaos, and the Fed will decide to devalue the dollar by half overnight. I don't know the technicalities of how that would happen. Wouldn't they have to re-monetize gold so they have something to devalue the dollar against? Actually, if you're the corrupt all-powerful gov't, why re-monetize gold and impose a limit on yourself? Why not just issue a new fiat currency and revalue the dollar against that? If you're the US gov't, or the G8 for that matter, you can impose whatever currency you want on the citizenry because that's what you demand taxes be paid in or you go to jail. So even if the citizens of the world trash their dollars and flee to gold, unless there is an actual revolt, or a new class of politicians who are more like the founding fathers in terms of wisdom, all the gov't has to do is issue a new fiat currency, dramatically cut the current debt load by revauling the dollar to the new currency, and poof, gold is dead. Obviously, there would be massive reprecussions globally in terms of reserve currency status and whether the international community would accept our new fiat currency and don't get me wrong, until I started writing this, I was a gold bug, and maybe I still am, and I do think gold gets to the $1600s on this next leg up, but if you think about the power of gov't in this modern age, combined with the ignorance of the populace, especially about all things monetary, and the human temptation for central banks the world over to choose manipulation over restriction, why would tradition and 5000 years of history and all the arguments about all fiat currencies dying into the warm embrace of gold HAVE to come true? Even if the central banks have all the gold they claim they do, why reverse the perfect strategy over the last century to cut the restrictions of gold from the monetary system? IF they have the gold then I guess you could make the case that returning to a gold standard of some sort would be in their interest, but not really when you consider how restricted bank loans and debt issuance becomes, and every monetary system after a certain point in time was decided upon by the gov't of that era, not necessarily chosen by the market (like it should be). Just because the founding fathers were wise enough to choose gold and silver because of its ability to restrain the power of gov't and the excessive issuance of debt, doesn't mean the next monetary system has to be chosen with such care and insight. Maybe the next system is digital, maybe it's another fiat currency, maybe it's gold. I don't know. And I'm not trying to cast doubt on anyone, just trying to figure this out, but I think it's something to really consider because if you eliminate gold as the inevitable future of the monetary system, it's only value is a culturally imposed luxury/status item. I definitely think you should own some as protection, but not to an all-in degree simply because you believe gold is money and fiat is not based on history. Something is only worth what someone is willing to pay you for it, so an all-in bet on gold is believing the governments of the world will choose it as money. Maybe China will choose gold and it will be the final nail in the coffin that allows them to become the financial center of the world in the future, but it doesn't seem like they have the power and influence yet to pull that off. The G8 still runs the show, but if this was a global board game, all China has to do is cut the perverse trade relationship with the US, stop buying our debt, choose gold, and turn within. They have the cheap labor and the manufacturing. Once they crashed and burned, they could recover with a strong, gold-backed currency and refuse the fiat currencies of the world by demanding settlement in gold and thereby become the future center of power. BUT does that mean gold will become exponentially more valuable in the meltdown we will live through in the coming years? That is the question. And I don't know. I guess I could see it being a temporary flight to safety that the fiat currencies chase, but at some point it's value is determined by whether it's monetized or not. If the gov't didn't intervene, gold would be chased by failing paper, but you can't count out the G8 declaring internationally that gold is illegal to own because the hoarding is hurting the financial system, ala FDR in 1933. And that is why you can't push all-in. But it's foolish to have none.
Son, I have a bar that is haunted by the ghosts of Revolutionary Patriots who lived up the hills and up the creeks, just above me here.. On nights like this they flow down here to wallow with me. It is just a little catfishing, bourbon whiskey, buzzard fighting, tree frog clinging, river otter slinging, tree swallow singing, ancient American, sweet Southern wind blows kindly here, warm southern sun shines kindly here, green sod above, lie light, lie light, good night dear heart, good night, good night.
Sweet South Carolina for me....
pretty prose there feller
i think you are on the right track vis a vis gold, the fed, and china. i see it a little differently. money is power. the usa has all the money in the form of the dollar as the reserve currency. as long as the dollar is the reserve currency the usa is king of the world. china(and russia) is the main threat to the dollar hegemony with the yuan as its weapon. the usa must take china down in order for the usa(and the eurozone) to remain king of the hill. china must defend itself and is turning dollar reserves into gold reserves even encouraging private ownership of physical. besides economic(currency) war the usa is also encouraging a china spring to disrupt the social and political system of china. if china and the brics can successfully develope an alternative to the dollar the usa loses so things are getting urgent. if the usa is successful then(i think the bet is...)investment and manufacturing therefore jobs will return to the usa. if the chinese win the usa is done as an empire and will die a slow agonizing death like post war britain. if the usa feels like it is losing or will lose there will be world war and the usa loses. as you said, that is where the all in bet on au and ag comes in. if the usa loses and you don't have some tradable commodity you lose big. if the usa wins and you have lots of physical then you may take a hit but the usa won so who cares, life is good.
so the fed, as the de facto central bank of the west if not the world, seems willing to take down the west(rising interest rates in a declining economy!wtf!) to take down china, if it is necessary, betting that the usa and eurozone come out on top. it is an arrogant gamble that is doomed by its very arrogance. buy moar gold.
Someone put some time into this one. I think it is worth a re-post dragoneyes. Lot's of great questions asked.
Needs some paragraph editing though. I have no interest in fucking with what people write.
http://www.planetfeedback.com/index.php?level2=blog_viewpost&topic_id=300063&reply_id=129776
Nice post, well thought out.
+1 decent arguments. i think long term debt is in trouble. But, if you're holding short term debt which is constantly rolling over, capital depreciation (if there is any) will be comped with a higher coupon rate. I don't think short term debt is necessarily a bad trade IF the movement in rates is slow. What kills bonds are severe moves up and fast. A 4% yield on the 10 year is healthy, especially if it encourages government to get its fiscal house in order. and if 4% takes several months to arrive then, in my opinion, short term debt isn't as bad a position to take as many bond bears believe. However, if I might qualify it by saying that if UST's start being sold off by "other" holders of at leats $3T of it, then rates spike, and this kills the bond market, as you suggest.
Jim willie agrees with your thesis
3 part interview you tube
http://m.youtube.com/watch?v=A2WlpdIt7Hg
I am confused.
About what?
contrarian indicator says gold will rebound dramatically soon.....but we are in an alternate reality where time and space are suspended, the twilight zone.
Shitty week. I like my gold coins. I will still keep them no matter what. :-)
http://www.youtube.com/watch?v=IHjaW9sXl7s
Don't be. All you have been seeing is a gold heist, like from a bank, in the movies.
Just done purely by paper.
I can promise you by human nature, the Mr Bigs are still sitting around at night, admring and fondling their coins and bars.
To the mongrels that keep gaming the system it's just about making a profit. They don't understand value or values. They will keep pushing it up and down and make a profit in both directions.
Gold looks to be getting a bounce here to kill all the shorts. Long a little bit. Long the dollar. Oh wait, the dollar is dead......Looks like the USD has been range bound for years providing a nice base for a move up. We shall see. Stops in place folks? Or are you still 'stacking' for a day that might never come?
a move to where? maybe 90 on the index? $USD is done. It can't go up. $UST are being sold everywhere. thats pushing up yields. either bernanke buys them, or, US government defaults. either way its marginal monetization.
Stop with this dollar is dead shit. As long as we have the big guns it will never be dead
The dollar is dead already. USA big guns will not save the Dollar. China has big guns as well but rather than have a conventional war with the USA (which would only end in everyone getting fried), China sent its troops into the factories to build cheap stuff for Americans to buy. Why bomb American industry when you can destroy it with free market enterprise? China have been buying assets all over the world with US Dollar reserves like agriculture, gas fields (Browse in Western Australia most recently) and property. Why invade land with troops when you can just buy it. I have worked in Chinese factories and they are run like military operations. They even have 2 weeks military style training at induction to weed out the weak ones and indoctrinate them into the company philosophy. China has been at war with the west for the last 15 years and nobody has even noticed.
Most don't realize that the Korean and Viet Nam wars were both wars with China.
Russia was N Veetnam's prime ally; the VN and Chinese have not always had great relations.
China was not neutral during the war by any means, however.
Matter of fact, the Vietnamese and China fought each other after unification back in 1979.
When the first Bank Holiday is announced you will be glad you have precious metals.
When the dollar is replaced by the nuevodollar over the weekend you will be glad you have precious metals.
When you can only withdraw a limited amount of money from your bank every week you will be glad you have precious metals.
When you need a lifesaving operation in a Third World Economy that wants you to die because you are too old you will be glad you have precious metals.
When you want to cross the border that is finally fenced, (but to keep you in), you will be glad you have precious metals.
When you run out of lead from shooting the assholes who got us into this mess you will be glad you have precious metals.
(Feel free to add to the list).
They'll have to fence the Niagara & St. Lawrence Rivers & Lake Onatrio if they want to keep me & lots of other upstaters outta Canuckville.
It's just a hop skip and a jump away up here.
Damn but I've been trying to find it for years.
Can anyone tell me wear they hide those serial numbers on the SILVER canadian maple leafs?
Sort of on-topic: I've started reading a book I found years ago (and forgot about), a history of metal mining written by Georgius Agricola called "De Re Metallica." Originally published in 1556, it's a fascinating book. He describes the history of metal mining from antiquity down to his time in the most minute detail, with a large number of plates showing the processes, tools, and techniques used for mining and refining. Six hundred pages worth or so.
What really struck me - and I am not very far into the book, is that he acknowledges that even way back then, there were detractors to this whole mining business.
In Agricola's words:
"... the strongest argument of the detractors is that the fields are devastated by mining operations, for which reason formerly Italians were warned by law that no one should dig the earth for metals and so injure their very fertile fields, their vineyards, and their olive groves. Also they argue that the woods and groves are cut down, for there is need of an endless amount of wood for timbers, machines, and the smelting of metals. And when the woods and groves are felled, then are exterminated the beasts and birds, very many of which furnish a pleasant and agreeable food for man. Further, when the ores are washed, the water which has been used poisons the brooks and streams, and either destroys the fish or drives them away. Therefore, the inhabitants of these regions, on account of the devastation of their fields, woods, groves, brooks, and rivers, find great difficulty in procuring the necessities of life, and by reason of the destruction of the timber they are forced to greater expense in erecting buildings. Thus it is said, it is clear to all that there is greater detriment from mining than the value of the metals which the mining produces."
Nowadays, it's fossil fuel extraction causing most of this kind of ecological damage (e.g. Canadian tar sands, fracking, ocean drilling, etc). Black gold instead of the yellow kind. Same pattern though. The costs are in the future and to the subsequent generations, but all the benefits are now now now!
Thanks for that. Going to see if I can find a copy.
Let me lend a helping link:
Georgius Agricola, 'De Re Metallica', translated from the first latin edition of 1556
(attention: PDF) http://archimedes.mpiwg-berlin.mpg.de/docuserver/images/archimedes/agric...
This version is missing all the plates, which are most illustrative. WB7 would have a field day with the images in the printed book.
In this pdf, the quote I referenced started on the bottom of page 59 and continued onto page 60.
I saw a really good British documentary (Celtic Britain) about the Bronze age and how bronze became so valued, that it became a trading currency. It was so valuable, that copper miners would not have the benefit of tunneling through rock and digging out ore with bronze tools. They used lumps of rock to dig with instead. Bronze ceased to be an item of real value when its easier to aquire successor Iron, came into common use. Ultimately, currency will be whatever is most useful and hardest to obtain at any given time, place or circumstance. If you are on a liferaft in the midde of the ocean, then a drop of freshwater is worth more than all the gold in the universe. If someone were to invent a limitless free energy source, then oil would be worthless. If Alchemy worked, then the alchemist would make lots of money for a while until he watered down the value of Gold by producing too much. Sounds a bit like the Dollar and QE.
Do you have a link to the documentary?
On Iron compared to Gold in terms of rarity:
“Only in a supernova is it possible to create atoms with 30 protons, 40 protons, 50 protons or even 60 protons. Nature prefers even numbers for stability, but every so often, the star will forge an odd-numbered atom, a real rarity: gold! Gold is a rare, odd-numbered atom with 79 protons. For every single gold atom in the universe, there are 1 million iron atoms..."
-http://www.npr.org/templates/story/story.php?storyId=7397200
Wanda Sykes on Jay Leno calling Edward Snowden a traitor.
Apparently, she worked at N.S.A. when she was younger.
Fucking establishment cunt turncoat.
Too nice?
Wanda "I like pussy" Sykes prostitutes herself for her media owners. Thats how she makes a living. Who owns the media?
Cant disagree with her owners or she will find herself an unemployed slave?
The media monopoly will make sure she does not whore for them?
Goldman timed their call to perfect for my liking.
This paper price drop has the hallmarks of coordinated manipulation all over it.
The whole downside move and negative sentiment fly's in the face of actual underlying fundamentals.
So I'm holding on to what I have and building a cash position at the moment.
When I think the bottom has formed I'll jump in there and aggressively buy.
I wouldn't be suprised if they make a play for $1000/oz as it's a psychological breach point.
So, you are trying to time your entry into buying gold. I know what you are saying but be careful. It reminds me of the Irish parachutist who dived out of the plane with an American friend.
At the 500 metre mark the friend called out to him to pull the cord. The Irishman called out "not yet".
At the 200, 100 and 50 metre mark the same thing happened.
When he got down to the 5 metre mark his friend screamed out once again and the Irishman replied, "it's ok, I can jump from here."
This is a dangerous world so you need to make up your mind whether you are trying to get the cheapest price or whether you are trying to protect your capital. You can't have both.
Why'd he have to be a Mick?
Racist.
I'd strike him with my shilaylay!
Ask yourself which is harder to acquire? Walking into a coin store and buying some metal or walking into a bank and cashing a check for green cash, that is yours btw?
Stack green till Gold hits $700-$1000, then buy a little. There is a reason they don't want you having GREEN.
1. Couldn't the huge number of shorts be a reflection of that fact that Gold has had the worst quarter in 45 years?
2. Since most gold trading is done by HFT and formula-managed ETFs doesn't a huge number of relative short positions make sense. The machines have been reprogrammed. Gold will now go down.
3. Didn't ZH itself note that a huge number of producers are now threatened with un-economic mines? Doesn't that force them to hedge their long exposure to mines with a high cost of production?
Finally, I'm wondering whether anyone here has any evidence that gold can buy more than the corresponding number of dollars. I mean if somebody can show me they got 125 acres of farmland worth $1000.acre for 100 ounces of gold and would only have gotten 120 acres with the greenbacks, that would be interesting.
How many Glock 19s should I be able to get for an ounce of gold?
Keep stacking green my friend and we can compare notes when the shit hits the fan. No need to discuss further if you are convinced about the quality of your green.
I personally got a great trade at a recent gun show by using Ag; about 22% over cash.
I traded some cull morgan dollars yesterday @ 23 paper dollars each.
Wow, farmland and firearms? You pick out two commodities that are just as valuable as gold to compare prices? I ain't selling either of those that I have.
i thought yesterday was the bottom on gold and silver as we have corrected half way back. Also Goldman lowered their price objective. Usually when they do that they are covering shorts. Also alot of traders have shorted the mineing stocks against their long position in equities. I believe the stock market has topped out along with the global printing of money is a factor in being long the precious metals. The other reason for the selling of PM was the threat of deflation. Good trading all!
I've just read the first several chapters of The Runagate Courage. It was written circa 1670 by Hans Jacob Christoffel von Grimmelshausen, who also wrote the Simplicissimus books. Runagate is written from the perspective of a woman; it is what Brecht's play "Mother Courage" was modeled on. Accurate military history in novel form.
Grimmelshausen was kidnapped as a child, and spent his youth and young adulthood fighting in the Thirty Years' War. In later years, he supported his family by writing novels about it. They are really well written; very engaging, have real literary merit, and HE WAS THERE. My problem with them is that they are too accurate; I do not care to read about war captives being buried neck deep and then stomped to death by the calvary, or the military throwing prostitutes to civilians to be literally raped to death. The fact that his books were immensely popular when they came out, goes to show you how brutalized the population was by those wars. It was normal for his readers.
Anyway. In the end (I looked ahead since it is too gruesome for me to finish), Runagate, who is now old, whose beauty is now gone, whose husbands and lovers have all been killed in battles, whose fighting abilities have waned (she was herself keen on warfare), who has no family (everyone's dead), has now gone to live with the Gypsies, WITH HER LUMP OF GOLD. She LOVES her lump of gold. It is everything to her; it is what stands between her and starvation and worse. Grimmelshausen does not leave the reader with a sense of ambiguity: this lump of gold is all that matters for this helpless person. Just FYI, his books are still well-read in Germany; wonder if that affects their view of gold.
We have a friend whose mother got the family out of Leningrad before the siege, by bribing the guards with her fur coat. I guess gold would have worked; I don't know.
I don't own any myself. Nowhere to store it. Of course it's a crummy "investment." But I do think it is rational for a person to own a small amount.
Covered my gold short yesterday. I think the bottom may be in for the next few days. I'm watching for a short-covering rally to around 1275. After that, continued downside. Of course, that's as of today :)
Look at all those shorts.... I just put in an order for 200 tons monday.........
But yet Karl Denniger is ROTFLMAO at the decline in gold in one post the other day and then crying like a baby that Blackberry stock, that he is heavily invested in, took it in the rear yesterday.....life is good.
Denniger is a parody of himself. Clueless.
Meet the physicist causing this and other damage to financial markets............
Is it just a coincidence this guy has worked with one of the largest currency brokers for the past 10 years.......Oanda who are tied to all the major banks? The title is of his lecture is: "Who Controls the World" http://www.tedxzurich.com/2012/08/james-b-glattfelder/Ok, I watch everyone so concerned about gold price etc. If you've read ZH for sometime you'll know that people are taking their physical gold due to MF Global, Germany wants their physical gold and so does Texas. WHY would it take the government 7 years to get Germany their gold? Bernacke HAS NOT pulled M3 money out of the market AND gold shorts are at an ALL time high with gold having it's worse quarter in almost 50 years................THE ONLY ONE NOT REQUIRED TO FULFILL MARGIN REQUIREMENTS IS THE FEDERAL RESERVE........THEY CAN ADD ZEROS TO THEIR ACCOUNTS DAILY AND THEY DONT CARE IF THEY WIN OR LOSE A TRADE.
Disturbances sweep across E. Saudi oil region
DEBKAfile June 28, 2013, 9:49 PM (GMT+02:00)Despite the news blackout imposed by Riyadh, DEBKAfile reports widespread riots and clashes have been sweeping the oil-rich Eastern Provinces of Saudi Arabia between Shiite demonstrators and security forces, leaving unknown numbers of dead and wounded. One of the most violent incidents erupted at the funeral of a Shiite demonstrator shot dead by the police. The mourners set fire to police vehicles and shouted slogans calling for the overthrow of the Saudi throne. Friday night, heavy security forces reinforcements streamed to the afflicted region to crack down on the unrest.
Saudi spring?
It's bound to come.
Damn, a great big gold bug group hug last night and I missed it.
rumors are some major banks will go bust and no bailouts this time
....and depositors will be left holding the bag....never the directors
Here comes the new great ZH-predicted crash, same as the old great ZH-predicted crash. Meanwhile the S&P 500 had its best six months since 1998.
--bks
So I guess your prediction is never ending drug induced euphoria
My prediction is that in my lifetime people will always be willing to sell me their precious gold for my useless hundred dollar bills and that the corner grocery will never accept gold bullion for milk and bread but will always accept fiat currency. How much tinfoil does it take to believe differently?
--bks
"the corner grocery store"
Says it all.
The question is which version of fiat currency anyone will accept.
Records in shorts and longs and low comex inventory. How could this not be planned when everything else is? Big players want physical and judging by the timing on the big dips I would say it is Asia
"Bundesbank gold repatriation: ongoing.
good luck with that, kamerads,
heh.. heh
um.. what percentage of the law is possesion?
The powers that be -- go long to go short It's a cycle. Now the mostly long banks, via computers, can go short whenever the price of gold goes too high in their clients' opinions, and vice versa.
Gold has no innate value. It's a shiny trinket to trade for food, water, fuel, shelter, clothes, but when those aren't available, it makes a nice paper weight.
Yea. Food has lots of innate value until ou eat it and shit it out as fertilizer. For every commodity it's only a matter of the right time and place where it becomes useful. True of gold also.