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Peter Schiff Asks "Is This The Green Light For Gold?"

Tyler Durden's picture


Submitted by Peter Schiff via Euro Pacific Capital,

It is rare that investors are given a road map. It is rarer still that the vast majority of those who get it are unable to understand the clear signs and directions it contains. When this happens the few who can actually read the map find themselves in an enviable position. Such is currently the case with gold and gold-related investments. 

The common wisdom on Wall Street is that gold has seen the moment of its greatness flicker. This confidence has been fueled by three beliefs:  A) the Fed will soon begin trimming its monthly purchases of Treasury and Mortgage Backed Securities (commonly called the "taper"), B) the growing strength of the U.S. economy is creating investment opportunities that will cause people to dump defensive assets like gold, and C) the renewed confidence in the U.S. economy will shore up the dollar and severely diminish gold's allure as a safe haven. All three of these assumptions are false. (Our new edition of the Global Investor Newsletter explores how the attraction never dimmed in India).  

Recent developments suggest the opposite, that:

A) the Fed has no exit strategy and is more likely to expand its QE program than diminish it,


B) the U. S. economy is stuck in below-trend growth and possibly headed for another recession


C) America's refusal to deal with its fiscal problems will undermine international faith in the dollar.

Parallel confusion can be found in Wall Street's reaction to the debt ceiling drama (for more on this see my prior commentary on the Debt Ceiling Delusions). Many had concluded that the danger was that Congress would fail to raise the ceiling. But the real peril was that it would be raised without any mitigating effort to get in front of our debt problems. Of course, that is just what happened.

These errors can be seen most clearly in the gold market. Last week, Goldman Sachs, the 800-pound gorilla of Wall Street, issued a research report that many read as gold's obituary.The report declared that any kind of agreement in Washington that would forestall an immediate debt default, and defuse the crisis, would be a "slam dunk sell" for gold. Given that most people never believed Congress would really force the issue, the Goldman final note to its report initiated a panic selling in gold. Of course, just as I stated on numerous radio and television appearances in the day or so following the Goldman report, the "smartest guys in the room" turned out to be wrong. As soon as Congress agreed to kick the can, gold futures climbed $40 in one day.

Experts also warned that the dollar would decline if the debt ceiling was not raised. But when it was raised (actually it was suspended completely until February 2014) the dollar immediately sold off to a 8 ½ month low against the euro. Ironically many feared that failing to raise the debt ceiling would threaten the dollar's role as the world's reserve currency. In reality, it's the continued lifting of that ceiling that is undermining its credibility.

The markets were similarly wrong-footed last month when the "The Taper That Wasn't" caught everyone by surprise. The shock stemmed from Wall Street's belief in the Fed's false bravado and the conclusions of mainstream economists that the economy was improving. I countered by saying that the signs of improvement (most notably rising stock and real estate prices) were simply the direct results of the QE itself and that a removal of the QE would stop the "recovery" dead in its tracks. Despite the Fed surprise, most people still believe that it is itching to pull the taper trigger and that it will do so at its earliest opportunity (although many now concede that it may have to wait until this political mess is resolved). In contrast, I believe we are now stuck in a trap of infinite QE (which is the theme of my Newsletter issued last week).

The reality is that Washington has now committed itself to a policy of permanent debt increase and QE infinity that can only possibly end in one way: a currency crisis. While the dollar's status as reserve currency, and America's position as both the world's largest economy and its largest debtor, will create a difficult and unpredictable path towards that destination, the ultimate arrival can't be doubted. The fact that few investors are drawing these conclusions has allowed gold, and precious metal mining stocks, to remain close to multi year lows, even while these recent developments should be signaling otherwise. This creates an opportunity.

Gold moved from $300 to $1,800 not because investors believed the government would hold the line on debt, but because they believed that the U.S. fiscal position would get progressively worse. That is what happened this week. By deciding to once again kick the can down the road, Washington did not avoid a debt crisis. They simply delayed it. That is why I tried to inform investors that gold should rally if the debt limit were raised.Instead most investors put their faith in Goldman Sachs. 

Investors should be concluding that America will never deal with its fiscal problems on its own terms. In fact, since we have now redefined the problem as the debt ceiling, rather than the debt itself, all efforts to solve the real problem may be cast aside. It now falls on our nation's creditors to provide the badly needed financial discipline that our own elected leaders lack the courage to face. That discipline will take the form of a dollar crisis, which will morph into a sovereign debt crisis. This would send U.S. consumer prices soaring, push the economy deeper into recession, and exert massive upward pressure on U.S. interest rates. At that point the Fed will have a very difficult decision to make: vastly expand QE to buy up all the bonds that the world is trying to unload (which could crash the dollar), or to allow bonds to fall and interest rates to soar (thereby crashing the economy instead).

The hard choices that our leaders have just avoided will have to be made someday under far more burdensome circumstances. It will have to choose which promises to keep and which to break. Much of the government will be shut down, this time for real. If the Fed does the wrong thing and expands QE to keep rates low, the ensuing dollar collapse will be even more damaging to our economy and our creditors. Sure, none of the promises will be technically broken, but they will be rendered meaningless, as the bills will be paid with nearly worthless money. 

In fact, the Chinese may finally be getting the message. Late last week, as the debt ceiling farce gathered steam in Washington, China's state-run news agency issued perhaps its most dire warning to date on the subject: "it is perhaps a good time for the befuddled world to start considering building a de-Americanized world." Sometimes maps can be very easy to read. If the dollar is doomed, gold should rise.


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Mon, 10/21/2013 - 22:08 | 4078143 grid-b-gone
grid-b-gone's picture

The timing may be in question, but here is the roadmap

Mon, 10/21/2013 - 22:54 | 4078263 Pinto Currency
Pinto Currency's picture


The LBMA and Comex are primarily paper markets trading hundreds and hundreds of millions of ounces of gold and silver that do not exist every day.  There is infiinite supply for those who accept it.

The price cannot move in a meaningful manner until the supply of physical gold and silver to the market dries-up (and they will).  Until then, the price is simply set much like adjusting a screw each day.

Mon, 10/21/2013 - 22:55 | 4078273 Supernova Born
Supernova Born's picture

I seriously love all these reality-based posts.

CNBS is always there for the hope and bullshit deprived.

I wonder why the cheerleader posters of hope and bullshit are working OT today?

Mon, 10/21/2013 - 23:02 | 4078295 DoChenRollingBearing
DoChenRollingBearing's picture

Oro, pesez!

I hope to hav a report on gold availability to retail investors here in Peru in a week or so.


Ciao de Chiclayo!

Mon, 10/21/2013 - 23:18 | 4078334 Abi Normal
Abi Normal's picture

BADGES???  We don't have to show you no stininking BADGES!!!!!

PM's, Land w/ water access, Beans, Bullets, a community, knowledge and a lot of guts, that is a winning formula!!!

Tue, 10/22/2013 - 01:28 | 4078519 lasvegaspersona
lasvegaspersona's picture


you are close.

Fofoa just post the real reason the gold price is drifting...the price of gold is set in the forex market and the movement of physical and sentiment towards physical is almost nothing.

It amazes me that Schiff, who is right in every aspect  of his argument, does not see that gold price is at the mercy of derivative markets.

The clue as to when this might end can be seen in the GLD inventory. This is the last large stash of real gold and it dropped 10 tons today, over 450 tons this year.

When GLD reaches some point then no more physical will be there to  keep the paper markets alive.

Until then the price of gold will likely fall.

Tue, 10/22/2013 - 07:58 | 4078793 kralizec
kralizec's picture

Good point.  And keeping a watchful eye on Central Banker transactions is another good idea!

Tue, 10/22/2013 - 09:48 | 4079096 Pinto Currency
Pinto Currency's picture


Sentiment toward phyiscal gold in the US may be nothing, but that is not the primary physical market.

Please forward this info to Fofoa and ask him if China is delivering more than 2,000 tonnes of gold bars on the SGE alone ths year, how we can have no interest in physical gold.

GOFO was negative for more than 50 days this past summer and is now negative again.  Interest in physical gold is not almost nothing.


Tue, 10/22/2013 - 12:36 | 4079787 The Hawk
The Hawk's picture

The article states that, well...

"$240B per day in 2011, the equivalent of 5,400 tonnes total, or 2,700 tonnes changing hands every day! And that's from 64% of the LBMA members reporting, so it's likely higher, especially once you add in non-LBMA (retail) FOREX trading."

Which would dwarf what's happening in the physical market... not saying Asian demand is irrelevant by any means...


Wed, 10/23/2013 - 01:50 | 4081928 Pinto Currency
Pinto Currency's picture


The trading of gold derivatives to set the gold price is artificially pricing gold far below any real market price reflecting demand.

The Chinese are only a fraction of the physical market that is being sucked completely dry at the artificially low price set by the unallocated/fake gold paper markets in London and NY.

Gold Core's paper from August estimates daily trading on the LBMA at 290 million oz per day. The vast majority of this volume is pretend gold that is trading on the LBMA.

This farce of a market creates an apparent oversupply of gold by trading gold nothings instead of gold - the result is that physical gold has screaming high demand now because the paper market and the physical markets have been divorced.

Tue, 10/22/2013 - 08:51 | 4078979 Urban Redneck
Urban Redneck's picture

DUDE, without fofoas verbal diarrhea (which disproves a certain probability theory involving a monkey and typewriter): the Crimex and GLD are DERIVATIVE MARKETS, so your statement is somewhat of a non-sequitur. The gold market is all smoke and mirrors, and that's the way the big gold owners want it to be (since it keeps the arb rats and other momo chasers away)

Tue, 10/22/2013 - 10:33 | 4079356 gavrilo princip
gavrilo princip's picture

The human society, same as it ever was. We are changing only the hardware, but the programming stays the same.

Here is the movie about the silver mining, it is worth purchasing it.

Tue, 10/22/2013 - 00:28 | 4078449 buyingsterling
buyingsterling's picture

The timing may be in question, but here is the roadmap


The video is going viral. 600,000_ + hits in about a week.

Tue, 10/22/2013 - 07:09 | 4078743 let-them-eat-cake
let-them-eat-cake's picture

Just watched it - excellent.


Show it to your kids!

Tue, 10/22/2013 - 07:19 | 4078754 let-them-eat-cake
let-them-eat-cake's picture

Just watched it - excellent.


Show it to your kids!

Tue, 10/22/2013 - 02:36 | 4078535 Ham-bone
Ham-bone's picture

interest rates will likely continue going down as they have for 34 yrs straight...the 10yr will likely make sub 1% lows in Obama's 2nd term...there will likely be no interest rate crisis.  Apparently this is what the Fed and QE were made for. 

US pays less now in total interest on our debt of $17 T than we did when debt was $10 T...that is the magic of a printing press w/in a ponzi...and so long as you get all other major currencies to do the same...nobodies currency collapses vis-a-vis anothers.  Sick game but a game that can go on indefinitely.

Of course if commodities or PM's surged then the game would be over and currency debasement would cause a run out of one, many, or all fiat...but that is not happening.  In $ terms, a single commodity is at new highs (cattle) and nearly all are well below their '08 highs (energy) or '11 highs (metals / PM's, grains, sugar, cocoa, coffee, OJ, cotton)...only other commodities along w/ cattle even near all time highs are lumber and hogs. 

So, if the only avenues for the new liquidity is somehow all time highs in stocks, RE, and CRE...while commodities are not moving likewise...we must be honest that the game is not turning out as we envisioned.  PM's are presently providing no protection.  No forward statement here and no statement about PM's significant rise pre-'11...but since '11, commodities in general and PM's in particular are a bust.  We can all guess why, the sustainability of that, but for now TPTB are winning if we judge by their desire to re-flate RE/CRE and stock bubbles and maintain ever lower interest rates while making all other assets as unappealing as possible.  Discuss.

Tue, 10/22/2013 - 05:29 | 4078659 formadesika3
formadesika3's picture

Okay but there's nothing to discuss until you write something about the petrodollar. The petrodollar throws everything into a cocked hat when it comes to discussing commodity prices.

Tue, 10/22/2013 - 08:49 | 4078976 29.5 hours
29.5 hours's picture


So the general tide in economic relations will remain deflationary -- with the necessity of currency creation in undreamed-of quantities to provide the optics of normalcy.

Yet, if the heartbeat of world capitalism is getting that weak, the situation is unstable. Any system this unhealthy must soon meet with some blow (natural or manmade) that puts the whole system back into unpredictable motion.

Money creation (and most of what governments are doing now) is playing Enron accounting with Mother Nature. She will not be denied for long.


Tue, 10/22/2013 - 08:58 | 4079024 Urban Redneck
Urban Redneck's picture

It's called a yield CURVE, and since there is no effective 10-yr market anymore the rate at that point on the curve is meaningless.

No valid premise = no point in discussion.

Tue, 10/22/2013 - 09:01 | 4079038 Race Car Driver
Race Car Driver's picture

> Sick game but a game that can go on indefinitely.

This is a fallacy. It cannot go on indefinitely. See: Zimbabwe

See also: your shrinking grocery store products that get more expensive by the week.

People must eat to survive. Food cannot be printed out of thin air. People must be able to afford food, or they will riot. This is where we are right now. The .gov knows this and has been preparing accordingly with weapon purchases by DHS.

The food stamp allotment is gonna shrink next month. Less food in the grocery cart - less (junk) food in people's stomaches.

We should all plan accordingly ... because this shit ain't gonna go on indefinitely - because it can't.

Tue, 10/22/2013 - 02:15 | 4078560 Bro of the Sorr...
Bro of the Sorrowful Figure's picture

i love watching old schiff interviews to see his transformation from nerdy dude to total bro. used to speak softly in a higher geeky voice back in the early 2000s, not entirely sure of himself, slouched over etc. now he's clearly confident that everyone else is The Asshole and just leaves a nice dump on the MSM puppetry's collective chest after he's finished himself off during all of his tv appearances now. (you're welcome for the imagery)

the timing is still very much in question. although if you listen to most people here--posters included--it sounds like it is, without a doubt, going to happen tomorrow. and if not tomorrow definitely the day after that. personally, im eyeing the 2016 election. something big is going to have to happen before then right?

Tue, 10/22/2013 - 05:50 | 4078669 ParkAveFlasher
ParkAveFlasher's picture

Thanks for the imagery.  I'm watching the gaps between debt ceiling "crises" close in parabolic fashion for timing.  When they see that they need revisit the same glass ceiling on ever-shortening timelines, when it is clear to tptb that they are launching up a parabolic curve, and they do that trillion per day, that is when the timing will become more apparent.

Tue, 10/22/2013 - 06:14 | 4078685 mvsjcl
mvsjcl's picture

Unless this "temporary suspension" of the debt ceiling is but the precursor for doing away with it all together.

Tue, 10/22/2013 - 03:13 | 4078578 Ham-bone
Ham-bone's picture

Peter doesn't follow his own thinking through...if there are no functioning markets, then there should be no market function expected. 

Take gold / s&p 500 ...from '09 to mid '11 they trade up similarly rising on QE liquidity and Fed's balance sheet expansion.  Then, in mid '11 s&p 500 suffers flash crash same relative time gold reaches it all time high.  BUT, from that point on despite ever more QE and Fed balance sheet expansion (and likewise for all CB's gloabally) gold begins falling while s&p 500 resumes its march ever higher.  What were twins feeding from the same liquidity teat suddenly became opposites despite no change in liquidity.  One begins withering while the other grows fat.  Had gold continued on the trajectory it was on and the trajectory the s&p 500 would be somewhere around $2500 and other commodities likewise would have soared.  But seems the liquidity teats were only made available to select Fed sanctioned sectors (equities, bonds, RE/CRE).

Look @ any gold / stock indice and you can see the total change.  To expect a re-emergence of market based action now seems folly and simple hope over reason.  I'm not saying don't own gold or silver, I'm just saying don't buy it for economic or financial reasons...the only reason to buy these now are based on political actions...not economic or financial markets.

Tue, 10/22/2013 - 03:15 | 4078587 fonzannoon
fonzannoon's picture

exactly right. Zirp has put a continual bid under stocks and bonds. Gold broke down. It will continue to be this way until countries band together and truly start dumping the dollar. I could see all gold inventories being depleted at this point and everyone still trading it and happily settlling in cash and never demanding delivery. Banks/Countries etc. are all tied together this time around and if they blow somebody's brains out it ends up being mass suicide and they all know it and are under strict orders to play along forever.

Tue, 10/22/2013 - 03:23 | 4078590 Ham-bone
Ham-bone's picture

Fonz - ur trolling the comments section pretty late...u a fellow West coast guy or just insomniac???

Tue, 10/22/2013 - 03:30 | 4078595 fonzannoon
fonzannoon's picture

I don't sleep very well in general. I'm an east coast guy so yeah it's late for me. I usually am up around 5am but the last few days I can't sleep. This market seems like total cruise control so I should be sleeping like a baby. I guess it just seems so easy lately that I am getting a bit concerned that complacency is going to get my ass kicked again and i always swore i would not let that happen.

where are you at?

Tue, 10/22/2013 - 03:45 | 4078598 Ham-bone
Ham-bone's picture

proud to be a native Oregonian - grew up on the E side in ranching country but lived all over in asia and europe along the way for work.  Now glad to be back home. 

 the lack of checks and balances governmentally and marketwise is worrisome.  The lack of a market worries me...everything is at some unknown parties decree.

Tue, 10/22/2013 - 03:46 | 4078607 fonzannoon
fonzannoon's picture

as someone who spent time in those places, do you have a view on the future of the dollar? I am going to try for one more hour of sleep so I will catch you on here at a different time. It ain't exactly early there either right now so no need to answer that now. Have a good night man and let's pick it up later. I always appreciate input from people standing/having stood in places I have not. later man.

Tue, 10/22/2013 - 06:21 | 4078690 negative rates
negative rates's picture

Yee aint a detective er ya? 

Tue, 10/22/2013 - 08:33 | 4078902 Sean7k
Sean7k's picture

Hambone, while I wholeheatedly agree with your analysis here, I would sugget a careful reading of "When Money Dies" could be helpful.

The German widow is told by her banker to transfer her savings into gold, but fails to listen. In the coming years, both gold and stocks rise in price- keeping pace with inflation, until hyperinflation kicks in and then only gold becomes a safe haven. 

Dollar value effects business, making hyperinflation a business killer. Industry put as much money out of reach, in other currencies, in other countries, until it all just failed. Failure happened quickly, at the tail end of the hyper episode. Only gold and food survived.

I think there are bigger problems at work here than gold or currency values. There is the reinstitution of serfdom, the destruction of liberty and the mass hyponotic suggestions that retrain whole populations to believe what they are told. Important ideas are hidden or debased. People no longer understand what money is or how important freedom remains.

What benefit is it, if we gain income in relation to others, if a power arises that merely confiscates it away? We forget the power of tyranny, the all consuming nature that re-orders lives. The Elite class (especially the zionists) are driving this train and they alone know the destination. However, if history is a guide, the destination is slavery. Slavery has evolved into new forms that deceive the people, but it is slavery all the same. 

Slaves cannot own property, sound familiar? Slaves cannot determine wages, sound familiar? Slaves cannot leave the plantation, are we not moving in that direction? 

What good is wealth, if we lose our liberty?

Tue, 10/22/2013 - 10:48 | 4079191 Urban Redneck
Urban Redneck's picture

I haven't read Fergusson in a few years, but IF he was pushing the notion that only gold and "food" survived the episode it is utter BS.

Stocks are an asset class, not an asset, so one much look at individual stock's (valuation) - P/E, P/B, or P/FCF are not irrelevant in such a context since an investor should be looking at what is the future earning CAPACITY and DURABILITY of the underlying assets e.g. Land and PPE (customers and intellectual property are about as durable as Uncle Ben's 1-ply). Krupp, Benz, BMW, Bremer Vulkan, and a host of others all survived the mad money printers of Weimar. There is a place for gold, but it is extremely limited, just like the supply of real gold.

The situation of some poor widow and Gustav Krupp are worlds apart, but had he went to gold, granny wouldn't have even had the option to buy gold in the first place.

Tue, 10/22/2013 - 11:51 | 4079641 Sean7k
Sean7k's picture

Stocks did extremely well as an asset class (better than gold) until the currency collapse- then they collapsed also. Gold did not. 

Please show me the future earning capacity of assets in the rust belt, Detroit, etc. Krupp, Benz and the others moved their operations out of country to survive the collapse, maintaining their capital in foreign currencies and gold. 

I agree that gold has limited opportunities, but stocks are even worse- which is the point. Now, if you can profit short term and know when to get in and out, as well as escape capital controls or currency debasement (which could be global) you obviously have it all figured out. Further, by the time the widow figured it out- she couldn't go to gold- it was not available. Krup had bought it up, as well as others.

Since most of us are not in a position to bid for scarce capital in a time of crisis, we can only plan for reasonable possibilities. 


Tue, 10/22/2013 - 14:11 | 4080111 Urban Redneck
Urban Redneck's picture

The rust belt isn't comparable, because those theoretically productive assets were abandoned.

But he's the rather more substantial problem I have with the gold-bug line- If granny had simply sold her marks and bought GBP in 1921 when gold was trading at 535p/oz she could have sold those very same fiat that JM Keynes himself was busy devaluing to pay off Britain's War/Empire debts and then bought 25% MOAR GOLD! with the same supply of JMK's finest 1-ply in 1925 at 427p/oz after the hyperinflation.

If granny had a stock broker and wanted to look beyond the Continent or the Frankfurt exchange, in 1921 the US was just coming out of a depression and kicking off the Roaring 20's -- she could have ridden the DOW from a low of 63 up to just over a hundred, and then bought EVEN MOAR GOLD! without her broker outperforming his benchmark. And if she was Jewish then she would already have the paper share certificates to burn at over 150 prior her flight from the Nazis in the later 30's (and that price includes the unrealized losses in the 1929 crash, and bypasses the risk of George Soros or his daddy finding the finding the gold Charlie Munger thought it was wise to sew into their clothes, after the Nazis had already slammed the exit door closed on that maneuver).

In order to say stocks didn't do as well as gold (which didn't do as well a Keynes) you have to confine yourself to the local stock market (priced in a hyper-inflating currency) and pick losers (either by virtue of timing or bankruptcy). It's certainly possible, and there is no bankruptcy risk in physical gold, but that doesn't make gold the "best investment".

Tue, 10/22/2013 - 16:04 | 4080560 Sean7k
Sean7k's picture

The rust belt isn't comparable? The misallocation of capital is ALWAYS comparable. You're too smart to take a cop out.

As for goldbugs, they do have a problem, this time is different: markets no longer exist. People no longer understand what money is, therefore they don't think of gold as money. Depending on historical behavior is pretty foolish in this situation.

As for the widow, like most citizens, she is not a financial whiz. How many people know how to invest in foreign stocks and bonds- remember, this is 1919. You ignore ignorance to make your argument. 

The stock market and all exchanges function to separate people from their wealth. All trading is insider trading, just some people are above the law. Now, that being said, you can profit handsomely in stocks, etc., but like a casino, the majority will be fleeced. They play percentages and win with them. They can afford to lose a bit here and there if it keeps everyone else coming in the doors.

Gold is never the best investment, power and influence are. Unfortunately, I don't have any and I doubt you do either. You're too smart to be picking arguments, when you're much better at educating. We need more people with the intelligence to persuade. It isn't as much fun, but it is useful.  


Tue, 10/22/2013 - 21:03 | 4081425 Urban Redneck
Urban Redneck's picture

The differences this time are certainly problematic- ALL the governments are in over their head and would rather acquire debt slaves or pilfer private savings and assets than admit to their folly, and they are are willing to gang up with each other against their own citizens. Which is why diversity is that much MORE important. Granny is probably not going to learn how to properly hedge a long equity or physical commodity position (apologies to my great aunt), so absent diversity one has the risk of being wrong, getting emotional at the wrong moment, or being targeted by the State. But I do think you're letting the old-timers off a bit easy. People who aren't in the business of money or don't do business with a lot of money can be excused, but the warning signs were all there, whether its Dr. Copper or the collapse in the bund/gilt spread (actually it was private paper back then), collapsing loan issuance, exploding avg. quarterly payrolls, in fairness there is a lot of noise in the 1918/19/20 data between the war readjustment and larger post-war recession, but how could it not be obvious what the government was doing by 1921? Anyway, I need to call it a night over here-

Tue, 10/22/2013 - 23:35 | 4081763 Sean7k
Sean7k's picture

Good nght.

Mon, 10/21/2013 - 22:11 | 4078150 Theta_Burn
Theta_Burn's picture

George Washington took the day off?

Mon, 10/21/2013 - 22:48 | 4078252 DoChenRollingBearing
DoChenRollingBearing's picture

His latest piece on espionage is NOT GOOD.

Mon, 10/21/2013 - 22:11 | 4078153 Tinky
Tinky's picture

Tru dat.

Mon, 10/21/2013 - 22:14 | 4078160 fourchan
fourchan's picture

add to this the american public on the whole are ignorant of what true value and money are,

they are ripe for the raping and there are a world of rapists ready and waiting.

as always the most patriotic thing you can do is buy and hold precious metals for the stability of your country.

its time to take back what the american bankers have taken from the people.

the time is now to secure your and your familys future against the bankers who have destroyed this republic over the last 100 years of their infestation.

Mon, 10/21/2013 - 22:17 | 4078176 NoWayJose
NoWayJose's picture

Not much has changed with respect to the paper gold sellers. As long as they can dump a million ounces at market whenever they want, gold is not going much higher until they stop, or until they lose control.

Mon, 10/21/2013 - 23:12 | 4078318 Pinto Currency
Pinto Currency's picture


Absolutely.  This is not the gold market of the 70s and 80s (where real gold actually traded (much of it on the Winnipeg exchange, strangely)) which is why the gold price projections today of the gold 'experts' is continually proved wrong.

Mon, 10/21/2013 - 22:18 | 4078178 vegas
vegas's picture

No, not until somebody with very deep pockets starts gobbling up the large destructive sell orders the Fed places throguh JPM that slams the market lower. One of these days, one of those 10 million ounce market sell orders is going to be met with a simple "buy it - you got anymore"? When that happens it's over for the manipulation and gold goes orbital in a very, very short time frame.

Tue, 10/22/2013 - 07:02 | 4078737 Running On Bing...
Running On Bingo Fuel's picture

You think that any of those large sell orders come from Peter's family? The Rothschilds.

Mon, 10/21/2013 - 22:21 | 4078185 Confundido
Confundido's picture

Gold is manipulated. That's it. The manipulation will go on until the Comex collapses and will not stop one minute earlier. Because of this, no technicals can be relevant in the long term. There is no interest from ANY big player in stopping this game. The West wants to keep it going as long as possible. The East wants to keep buying at artificial prices as long as possible. The Chinese know that eventually, to challenge the reserve status, they will have to peg their currency to gold, but ONLY at time zero, at the start. Thereafter, they are as much interested in levering it off gold as any one else. They will do this only when the cost of holding treasuries surpasses the benefit of pegging their currency to gold and not one minute earlier. The smart investor will have purchased as much gold as possible before time zero and sell at time zero. He will not hold any thereafter and the trade will be to reallocate proceeds of gold sale to real estate in a jurisdiction that will not repress landlords...wherever that place will be, if any.

Mon, 10/21/2013 - 22:43 | 4078244 RaceToTheBottom
RaceToTheBottom's picture


But gold ties will be loose at best, for any currency.  China needs gold cause it is a newcomer to the big leagues, plus it has a history of communism....

I think SDR rather than an exchange of single reserve currency.  That is for many reasons.  China is one (no western financial fuck will follow them alone).  Plus they will not loose the ability to deficit finance, ever. ever. ever.

SDR will be  weighted basket which includes china.  China is getting gold to get at the table.  But the game is the same.  Debase, deficit finance.  The game continues same as before.  To believe otherwise is crazy.

Mon, 10/21/2013 - 23:00 | 4078285 Supernova Born
Supernova Born's picture

Gold is the gold standard.

Mon, 10/21/2013 - 23:07 | 4078306 RaceToTheBottom
RaceToTheBottom's picture

Which is exactly why no reserve currency will be based on it, to any tight degree.

China does not have to value legal rights any more than the us does....  To your earlier comment.

Mon, 10/21/2013 - 23:21 | 4078309 Pinto Currency
Pinto Currency's picture


All the centrally planned financial systems in the east and west will issue 'gold backed' or 'gold standard' currencies that they will print the bejeezus out of.  They will not willingly ceed central control by intruducing true gold money.

Mon, 10/21/2013 - 22:54 | 4078271 DoChenRollingBearing
DoChenRollingBearing's picture



@ Confundido

I agree with all but your last comments about selling gold.   I would not sell more than half, tops.  Give it away!  But do not sell it all even if it goes up BIG.

Tue, 10/22/2013 - 00:24 | 4078446 Kirk2NCC1701
Kirk2NCC1701's picture

The reason you got so many Up arrows is because you make sense.

Your thesis/model aligns with my existing Plan of Record - with a small twist: At Zero Hour I intend to slim the bullion allocation from 30% to 10% (for posterity) and convert the rest into quality Property... the kind you describe.

Just can't help to mitigate risk and to diversify the asset allocation by class, type, and geography. I know history and human nature too well to do anything else. :-)

Tue, 10/22/2013 - 02:22 | 4078562 zebrasquid
zebrasquid's picture

RE is just another paper asset, really. Your 'ownership' is subject to the dictates of the state, the mob.

Tue, 10/22/2013 - 06:35 | 4078706 Singelguy
Singelguy's picture

Can you look into your crystal ball and share with us exactly when Zero Hour will arrive? Thanks

Tue, 10/22/2013 - 00:56 | 4078476 Tall Tom
Tall Tom's picture

CME Group was declared Too Big To Fail in July, 2011.


However the problem is not Gold. It is the Credit Default Swaps and the whole Derivatives Bubble. The US Taxpayer is on the hook for bailing them out.


Comex will only collapse when the US Government collapses. IMHO there is not a moment too soon for that eventuality. Take heed and prepare.


Heads up. It will happen...soon...most likely in no more than Three Years. Maybe by March...Earlier if we are really lucky???


YES DAMN IT...LUCKY. The longer the fraud is perpetrated the more extreme the impact. We may still be able to survive it. If it continues for an extended period the impact will be FATAL. Maybe the US Government does not survive if it happens. Maybe the US Dollar dies a deserved Death if it happens.


But social chaos and total destruction are guaranteed if it is prolonged much longer. Face it...We are cooked.

Mon, 10/21/2013 - 22:23 | 4078187 Bunga Bunga
Bunga Bunga's picture

I would be very cautious investing in things which the Wall St shills own too.

Mon, 10/21/2013 - 22:26 | 4078198 monopoly
monopoly's picture

Even now, only about 4 of my associates, family, friends own gold, silver. They think I am strange buying that crap. Well, let them think that. My stash is safe, I have quality miners all around me and am just being patient. Cannot believe the shit I see people buying at the malls, oblivious to what is festering all around them. Really thought it would have hit home by now. But then again, I did not realize how clueless most Americans are. 

Mon, 10/21/2013 - 22:52 | 4078266 fourchan
fourchan's picture

you are not alone, i happily share your insanity.

Mon, 10/21/2013 - 23:08 | 4078312 macholatte
macholatte's picture


Really thought it would have hit home by now. But then again, I did not realize how clueless most Americans are.


Sad, it's true.

It ain't just Americans.  The Propaganda Machine is global. The ignorance is global. The brain washing is like a wine stain on a white carpet. It ain't coming out. The carpet needs to be replaced.

And that's no accident. TPTB have been working their carnival act for many decades.


It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

Henry Ford


Tue, 10/22/2013 - 01:26 | 4078517 Non Passaran
Non Passaran's picture

And do you mind to share how many associates, friends and family members you have?

Mon, 10/21/2013 - 22:28 | 4078202 World of Debt
World of Debt's picture

Yes Peter... It's a WORLD OF DEBT!!! See Hilarious Music Video below "WORLD OF DEBT":

Mon, 10/21/2013 - 22:28 | 4078206 trustee
trustee's picture

This guy is a clown. Makes the same bullish call every week. Eventually Gold will turn higher and every other clown will foam at the mouth at how smart Peter Schiff is. It gets old....

Mon, 10/21/2013 - 23:43 | 4078371 TrulyBelieving
TrulyBelieving's picture

 If advice given by Peter Schiff and others of his mindset aren't for you, then perhaps economic theory espoused by John Keynes, Carl Marx, Paul Krugman, and Hyman Minsky would be more to your liking. Quite sure they can lead you to a more FOWARD approach.

Tue, 10/22/2013 - 01:05 | 4078488 Tall Tom
Tall Tom's picture

Then what are you doing here? Go elsewhere if it gets old. Personally I think that the MSM will be more pleasing to you.


You are not going to convince anyone here otherwise.


Did you know that there are over 170,000 Metric Tons of Gold? Disd you know that the USA is "supposedly" the one with the largest hoard at 8100 Tons? That is less than 5% of the World's Gold.


Isn't it curious that nobody sells their Physical Gold when the Paper price Declines? In other words we do not care about the price as we know that the US Dollar is SHIT?


These are very, very rich Private Holders, owners, of Gold.




It gets old responding to people as you. I am tired of your Bullshit. It is much easier pressing the Downarrow Button without explanation.


Go away and be sure to tune into MSNBC and watch that crap. Enjoy your meltdown.

Mon, 10/21/2013 - 22:30 | 4078211 trustee
trustee's picture

Him and Marc Faber predict doom every day. Once we get another crisis, the morons will pump out a book as to how they predicted it all...SIGH

Mon, 10/21/2013 - 23:32 | 4078363 Spumoni
Spumoni's picture

Predict doom? Once we get another crisis? WTF are you actually talking about? Are you commenting from the bar on Santraginus Six? had too many Pan Galactic Gargleblasters? Or are you just an idiot? Can't quite tell from here...the best way to know if its raining is to look out the window.

Tue, 10/22/2013 - 00:59 | 4078479 SilverIsKing
SilverIsKing's picture

What's your prediction?

Tue, 10/22/2013 - 03:07 | 4078584 McRocket
McRocket's picture

While I agree that Peter Schiff calls for gold rally's far too often (and I am a subscriber to his radio show), Marc Faber does no such thing. He talks of future trends and eventualities, not set timetables.

While I think Peter is dead right about the future, I think he over does the immediacy of the dollar collapse. But he has gold/silver to sell, so....

I think gold/silver will skyrocket...I just think it will be at least a 3-5 years; whereas Schiff seems to hint that it will be a few months/seasons.

But for my gold/silver sake, I SINCERELY hope I am wrong and he is right.

Tue, 10/22/2013 - 08:39 | 4078938 CJHames
CJHames's picture

Whatever the time frame before PM'S explode again, even if it is 3-5 years, the multiples retained will be worth it.

As for me, I'll be sitting it out on my 10-acre farm in th woods of North TX.  Plenty of food, wood, water and sunshine.  And, of course, protection.  Ya'll be good now, ya hear?

Mon, 10/21/2013 - 22:33 | 4078219 nakki
nakki's picture

I see a lot of talk about gold, but what about silver. Seems to me silver in 1 oz bars would be the play. Gold at $10000 an ounce would be hard to spend. Silver at $200 an ounce seems more viable. In both cases you still might need a small army.

Mon, 10/21/2013 - 23:25 | 4078353 merizobeach
merizobeach's picture

Don't get lost among the dollar quantities.  Gold and silver will retain their buying power.  It may or may not be now that their current buying power is depressed, but in any case, if/when an ounce of gold costs ten thousand US$, a barrel of oil may cost five hundred or a lot more.

Buying gold and silver are not for 'getting rich'; they are for preserving the wealth that you have already acquired.

Tue, 10/22/2013 - 00:41 | 4078461 FreeMktFisherMN
FreeMktFisherMN's picture

it's relative prices that matter, indeed. Look at historical ratios such as oil/silver, etc. 

Mon, 10/21/2013 - 22:35 | 4078223 quasimodo
quasimodo's picture

Good gawdfry, the guy cries wolf so often I think the wolf has given up too.

Mon, 10/21/2013 - 22:41 | 4078232 trustee
trustee's picture

It really is pathetic. All the goldbugs foam at the mouth when schiff speaks. He is their Gold God. 

All the morons talk about their physical gold yet they are constantly watching the USD price of gold and try to justify reasons for any downtrend (manipulation, ect). Trust me..if goldbugs really valued their physical like they say they do, they wouldnt give a damn about the USD price of gold. 

Mon, 10/21/2013 - 23:20 | 4078341 HoofHearted
HoofHearted's picture

I do care about the USd price of gold. I'm glad it is manipulated downward. My employer still pays me in fiat, and I want to keep converting that fiat to the good stuff. Lower price of gold in USD = more gold in my stash. (or silver...I also like silver)

Tue, 10/22/2013 - 10:42 | 4079390 StychoKiller
StychoKiller's picture

Best to measure Au/Ag/Pt/Pd/Rh in grams.  FRNs don't weigh nearly enough, despite the pretty ink job...

Tue, 10/22/2013 - 00:14 | 4078424 TrulyBelieving
TrulyBelieving's picture

Yes, "No prophet is ever honored in his own home town." Perhaps this is because as people grew up with him and saw his human condition and his weaknesses they would question, How could he know? He is nothing special, he's just like us. Or perhaps it is because he would proclaim 'If you will not change course disaster will be certain!', and they simply didn't want to hear it. Well my friend, things never change, do they?

Mon, 10/21/2013 - 22:38 | 4078228 DeltaDawn
DeltaDawn's picture

I will always adore Peter. He motivated me to get out before the crash of '08. Still with him on the future. It is just a matter of time.

Mon, 10/21/2013 - 22:40 | 4078234 the grateful un...
the grateful unemployed's picture

gold and mining stocks have been performing better when the market is optimistic about economic growth, that gives gold buyers two ways to win, and no way really to lose, the market crashes, and gold and mining stocks lose less than the equity market because gold (mining stocks) will not lose as much relative to the stock market in general. the ratio is at historic lows. the only thing wrong with gold (mining stocks) is that they may lanquish for years along with the rest of the economy, but if you own the tech babies you can lose 90% of your capital.

Mon, 10/21/2013 - 22:41 | 4078240 trustee
trustee's picture

Thats the biggest bunch of BS thus far in this thread...

Mon, 10/21/2013 - 23:27 | 4078358 BidnessMan
BidnessMan's picture

Really?  Gold stocks are just another form of paper depending upon a greater fool for any return.  No dividends, diluted by new share issues, big salaries for execs, expropriation risk, scam assays, scam reserve estimates, mining risk, fuel and other input cost increase, stock promotion costs, and so on.  The chump stockholders are last priority and nothing trickles down on average.  If stockholders don't like how the company is run, they have one alternative - sell their stock. 

Lots of gold stocks have lost 90%+ of their value.  Can you say Bre-X?  Just another promotion by a stock broker talking his book.  Paper gold is still paper. 

Tue, 10/22/2013 - 01:24 | 4078514 Non Passaran
Non Passaran's picture

Total BS.

> No dividends,

Wrong. Some have dividends.

> diluted by new share issues,

Not every miner is diluting

> big salaries for execs

Many have cut these expenses by 30%

> expropriation risk,

Don't buy miners in risky countries

> scam assays, scam reserve estimates,

Buy a producer and not an exploration company.

> mining risk, fuel and other

No risk, no profit. PM miners were doing okay when fuel was more expensive than it is now.

Mon, 10/21/2013 - 22:41 | 4078237 Al Huxley
Al Huxley's picture

I would bet that at least 10% of the American population's in a position to buy say 10oz of gold, if not in one block, then over a period of a few years.  Probably 50% or more could do the same with silver.  That would be 300,000,000 oz of gold ~9300 tons.  And 1.5 billion oz of silver - 1.5 years worth of mine supply.  That would be it - end of the whole fucking game, and for a price that, for that 10% of the population, would really just represent prudent 'worst-case' insurance on their financial assets, they wouldn't have to be crazy about it. 


It always amazes me

a) how easy it would be to get rid of the fucking parasites sucking the life out of the western world

b) that in spite of this, they keep getting away with it, and that 10% slice of the population keeps getting smaller and smaller and smaller...

Mon, 10/21/2013 - 22:57 | 4078283 DoChenRollingBearing
DoChenRollingBearing's picture

FOFOA thinks it will be when the Big Sellers stop selling as the public starts buying is when gold goes to "$55,000".

Mon, 10/21/2013 - 23:11 | 4078319 all-priced-in
all-priced-in's picture

What % of Americans could buy one ounce of $55K an ounce gold - even if their life depended on it?


How did you come up with $55k? 


I see that number kicked around in several places.

Tue, 10/22/2013 - 00:36 | 4078335 Pinto Currency
Pinto Currency's picture


FOFOA loves paper money; says gold is for saving but paper money is awesome.

Ask him/her if gold goes to $55k what stops it from going to one giga-dollar per oz. 

BTW phys gold availability is looking stressed in London.

Tue, 10/22/2013 - 01:19 | 4078506 Non Passaran
Non Passaran's picture

> BTW phys gold availability is looking stressed in London.

Wow that's huuuuge news... which we've been hearing for years.

I find it disturbing when ZH all comments talk about >$3K gold.
Anyone sane out there who's looking forward to $1,450/toz?

Tue, 10/22/2013 - 10:42 | 4079386 Toronto Kid
Toronto Kid's picture

*** Anyone sane out there who's looking forward to $1,450/toz? ***

Uh, no.  Kinda hoping for $1100 for this weekend, and praying Goldman hits the sell button by Friday.

Price won't ever hit $3000.  It'll go from $1400, where tptb currently keep the price, to $30,000 when tptb can no longer keep the price down.

Tue, 10/22/2013 - 08:23 | 4078864 Vooter
Vooter's picture

The same Americans who could buy a $55 loaf of bread...

Mon, 10/21/2013 - 22:59 | 4078288 Encroaching Darkness
Encroaching Darkness's picture

If you're going to do this, DO NOT USE ETFs, or anything besides PHYSICAL GOLD held OUTSIDE THE BANKING SYSTEM. That is, real coins, bars, etc. in YOUR control and not JPMs, WFs or anyone else's. And if possible, keep some of it overseas - done properly, you don't have to tell the IRS about it. Once they run out of excuses, they WILL come for your stash, "for the children" , "to prevent terrorists from using gold to finance their nefarious activities" , or for whatever other bullshit excuse they can come up with. If your gold is in Perth, Australia, for example, or Singapore, it will be that much more difficult for Uncle Satan to steal it.

And DO YOUR HOMEWORK. THere are scam artists and thieves all over the world, so figure out where you think is the safest place to keep it outside the U.S. It's no better to have the IMF or ECB steal it than Uncle Satan. You want it somewhere YOU control, and that rules out most of Europe (except possibly Switzerland, in some cases) and probably Russia and China.

The Fed Reserve and Treasury / IRS are EVIL, and will stop at nothing when it starts falling apart. DO SOMETHING to protect yourself and your family from these THIEVES before you cannot.

Tue, 10/22/2013 - 00:00 | 4078408 Hongcha
Hongcha's picture

Nice thoughts Encroaching Darkness; here is how I think they will confiscate PMs, cash hoards, anything they want:

They track cash withdrawals of any size.

They track gold purchases.

They can figure out who may have what.

XYZ 'Navigator' or God-only-knows-whomever is tending the database paid $13.95 an hour, packages it (or more likely, 'I' am already packaged in a profile) checks his 'herd' with a quick search or two and and sells me out to the gang down the street.  Maybe I get packaged into a tranche and sold to an Estonian gang that plunders my shit without leaving Albania.

Is this an exaggeration?  

They have all accounts, all passwords.  The only alternative is to back yourself off the grid as much as you can.

They are creating hell on earth for productive citizens.

Tue, 10/22/2013 - 01:23 | 4078511 Tall Tom
Tall Tom's picture

So your Gold Dealer records and reports your Gold purchases? It is time for you to find another dealer.


When I was buying Gold my Coin Dealer was paid in Cash and there is no paper trail, whatsoever, of what I had purchased. There is no legal requirement for that.


But if anyone reads what I write then they will know that I lost all that I had in that unfortunate Boating Accident. So they can tranche, sort, and compile lists all that they want. They will have to go to the Bottom of the Pacific, somewhere off of the coast of San Diego, to find mine.


And I thought that I had caught that Marlin...

Tue, 10/22/2013 - 01:47 | 4078537 darteaus
darteaus's picture

I am still pissed that your boat ran into mine in the dark!

It's a miracle that we both made it to shore.  I was so embarassed by the incident that I never filed a police report or insurance claim.  As a matter of fact, I was so hammered, I don't even remember what body of water that was!

Tue, 10/22/2013 - 02:37 | 4078571 Tall Tom
Tall Tom's picture

Yeah shit happens. You were so hammered...YOU RAN INTO ME.


Next time remember that on the water you Make Way to PORT and NOT STARBOARD. You are not driving a car.


As for that Corona Beer...I still want mine...with the old Pirate. I don't care about that bullshit that real men don't drink the Beer with fruit. 


That twist of Lime is what makes the damned Cuba Libra, a Cuba Libra. Other than that it is a Bacardi 151 and Coca-Cola...lame. I want that Corona with a twist o' Lime.

Tue, 10/22/2013 - 12:50 | 4079817 Encroaching Darkness
Encroaching Darkness's picture

Thank you for a civil, well-thought disagreement!

(1) They can track my cash withdrawals all they want. I am remodeling a house, have numerous pent-up demand purchases to make, etc. "Which withdrawal was that, what date? Oh, I must have been making a progress payment to my contractor - silly fellow gave me a discount for cash-only, so I took him to the cleaners. Got a whole new kitchen floor for only $1500!" (WHen I bought the materials and did the work myself). I did buy materials, new appliances, wiring, plumbing, etc., and have receipts.

(2) No one tracks cash gold purchases.

(3) Profiled or not, if it's overseas (see above) they can't take it without convincing a foreign government (lots of whom are getting pissed and refusing to play ball with the US) to seize it and turn it over. I doubt many will. once it becomes obvious that the game is over and the Feds lost.

(4) They have all accounts, all passwords, so keep just enough in the bank to cover ongoing expenses and buy gold with the rest, which you hide somewhere and TELL NO ONE YOU HAVE. What isn't known cannot be betrayed, even under torture. "I don't know! He went hiking every Sunday, and I hate sore feet, so I didn't go with him! I DON'T KNOW what he did with the gold!"

(5) Do get yourself off the grid, as much as possible, as soon as possible. Do it as subtly as possible - say, if you have gas heating, get a gas generator and a cutover switch, so that the generator only runs when the power goes off - and is quiet, acoustically insulated if necessary, and draws no attention. Learn what "blackout" requires, why it is necessary, and how to practice it.

They are creating Hell, but they will be the ones inhabiting it, eventually. Do not become discouraged - become CAPABLE.



Tue, 10/22/2013 - 04:01 | 4078615 2nd_Look
2nd_Look's picture

you are so right. ETFs  and other gold papers its a way like printing monney. On physical gold there is a premium. The problem is, if suddenly only physical gold is traded, the price would be so high, and because the governments cannot print gold, hence they would loose power. Surely the last thing they would do on purpose. 

Mon, 10/21/2013 - 23:01 | 4078291 Ranger4564
Ranger4564's picture

Cowardice, obedience, ignorance.

Mon, 10/21/2013 - 23:19 | 4078338 Zero Point
Zero Point's picture

Spot on Al. PMs are the money of free people. My only sell strategy is for land. Trustee is actually right, I couldn't give two short shits for the paper price.

I watch it for amusement, but I wouldn't be selling, even at 50 thou, just shopping for a farm.

Tue, 10/22/2013 - 01:09 | 4078495 Non Passaran
Non Passaran's picture

70% of the people want the government to take gold from others and give it to them rather than earn it themselves, so no chance of that ever happening.
Most people are so "leveraged" on redistribution and legal plunder that they can't change even though they may be aware of the problem (and solution).

Tue, 10/22/2013 - 01:57 | 4078545 Montgomery Burns
Montgomery Burns's picture

I'm well into the top 5% income wise and it would be difficult for me to spend $16000 on gold or silver in a year or even 2. The only way I could do it would be to cut almost all other discretionary spending.

Tue, 10/22/2013 - 09:52 | 4079221 Toronto Kid
Toronto Kid's picture

You might be into the top 5% income wise but you have jack in savings if you can't come up with 16,000 in less than 3 days.

Do you have an emergency fund?  What about a year's worth of food?  Toilet paper even?

Mon, 10/21/2013 - 23:13 | 4078324 Son of Loki
Son of Loki's picture

Some sectors are deflating so fast the Fed cannot print fast enough to prop them up. Other areas (food, airfare, health insurance,  housing) are soaring due to inflation and misallocation of capital.

Mon, 10/21/2013 - 23:36 | 4078372 Spumoni
Spumoni's picture

Hey, but remember that inflation is under control! My grocery bag has inflated by over 36% in two years, but the CPI says it ain't so.

Tue, 10/22/2013 - 00:55 | 4078473 Non Passaran
Non Passaran's picture

The CPI says on average, you're doing just great. :-)

On PMs, I have no insights to offer but I bought PM stawks yesterday (I can never wait for a down day...). I realize they may drop another 10% but if the dollar is going to the shitter then it's always okay time to buy moar.

Tue, 10/22/2013 - 08:19 | 4078845 Vooter
Vooter's picture

That's because your receipts are LYING again...goddamned receipts!

Mon, 10/21/2013 - 23:40 | 4078367 hustler etiquette
hustler etiquette's picture


Mon, 10/21/2013 - 23:52 | 4078395 DavidPierre
DavidPierre's picture


Capital controls.

Since last Wednesday when word came out regarding Chase bank sending letters out to some of their business customers, we have seen the Forbes article refuting "capital controls" and also another from Fox.

 Both articles "say" that JP Morgan "says" these are not capital controls being put in place. They say in the Fox article that the affected accounts are internet accounts and this will help them "police" these accounts so to speak. I looked through the news on JP Morgan and have not found any direct statement from them relating to this issue. I have also not seen any follow up letters to clients clarifying this I guess we just have to trust the reporters and take their words for it?

Capital controls are nearly ALWAYS implemented before a country devalues their currency.

That devaluation of a currency is normally forced on a country when they have either borrowed too much, printed too much currency...or both. In the case of the United States, we have done both and done them egregiously.

Capital controls are designed to not allow capital to get out of the way and into safety before a devaluation takes place. Implementing capital controls acts like a fence around a financial system and herds money inward and makes it difficult to escape.

Think of this like a hunter or fisherman with a rifle or shotgun. If a hunter had only one shot but needed meat for the whole winter he might feed corn to gather the deer closely in one area. In this manner he has a better chance of 2 deer lining up where one shot might get 2. Or a fisherman with a shotgun, his shotgun is of no use in the ocean but if the pond is small and with nets he can "herd" a school together...then one shot might get several fish to float to the surface dead.

I use the above "1 shot analogy" because a country that is forced to devalue has limited (maybe none) ammo left. They put themselves in a situation where the only option is to devalue or as we saw in Cyprus, "confiscate" assets balances.

In my opinion there is a 100% chance that the Dollar will be devalued.

Reset... this is just another name for devaluation. A "reset" will also involve "re marking" the price of Gold.

The one single option that the U.S. has is to mark the price of Gold up to a very high number. Pick one? $10,000. $100,000 or even $1 million per ounce. This would effectively reliquefy the system and make the debt already incurred of less relation to the "new found Treasury wealth" of higher priced Gold. This is what was done here in the U.S. by FDR when they remarked Gold from $20 to $35 per ounce in 1933.

There is just one little caveat however.

We must actually have the Gold!

If it turns out that Ft. Knox, West Point and the other depositories are either empty or the Gold that is there has already been leased out so as to impair our true ownership...a reset won't work.  If we have only very little Gold left and if the Chinese have 5,000 tons (or probably more by now), a "reset" will not help us at all and it would make the Chinese and anyone else with real physical Gold reserves the winners. In this hypothetical instance, The Chinese would then become the "financial rule makers" and we would have to play by THEIR rules.

 Devaluation/Reset is a given and the only question is "when". It is safe to say that it will surely be over a weekend and the weekend may be extended a few days. Will we do this to ourselves or will it be imposed by other nations or will market forces mandate it?

What is worthless will erode in value and what valuable will seek its higher value.

You must ask yourself these questions, if it is "free" to create more Dollars then what is a Dollar worth? If the cost of Gold is $1,300 per ounce and the cost of Silver $25 per ounce to mine (and rising), what will happen to supply should their prices not rise but costs to produce do rise? This is really simple stuff and has been played out literally 100's of times in the past. Any signs of capital controls should be what tips you off just in the nick of time that a devaluation is coming. The key is to position yourself ahead of time while you can do so without the impediment of capital restrictions, for now this is still the case.

Mon, 10/21/2013 - 23:57 | 4078404 Prairie Dog
Prairie Dog's picture

More cheap snake oil. Yawn. If you believe it, just buy gold. Good luck

Tue, 10/22/2013 - 00:10 | 4078426 unwashedmass
unwashedmass's picture

can't wait to see you run to gold and silver when the first bank bail-in hits in the US

Tue, 10/22/2013 - 01:42 | 4078530 darteaus
darteaus's picture

He'll be the guy braggin' that he bought it at $300!

Tue, 10/22/2013 - 01:49 | 4078539 Prairie Dog
Prairie Dog's picture

Mr Shifty's thesis implies the total collapse of Western civilization. Whatcha gonna buy with all that gold when the country is a smoking ruin? Methinks you'll muddle through, as always. After all, Americans are much richer in every way than they were in the early 1900s, despite a century of fiat currency.

Tue, 10/22/2013 - 04:45 | 4078632 darteaus
darteaus's picture


Tue, 10/22/2013 - 00:10 | 4078425 dust to dust
dust to dust's picture

 It is easy dig it out of the ground. Plenty of BLM land to do the digging. Due diligence in MT and Az. Carry a sidearm. Watch the varmits.

Tue, 10/22/2013 - 00:23 | 4078445 unwashedmass
unwashedmass's picture


confiscation seems somewhat unlikely with half our population armed to the teeth and no one trusting the government.  

Tue, 10/22/2013 - 01:16 | 4078501 banzai401
banzai401's picture

they confiscated in 1935 and back then the MEN were MEN, and they knew how to shoot,

Now it would be so fucking easy, cuz 95% of the USA are part of the SHIT FREE ARMY, and the MSM just say's WE TAKE the gold from the 5%, because its the right thing to do,... it will be the easiest robbery in history,

Overnight the MSM can & will associate "gold hoarding" with baby-fucking, ... you got bigger worry's than your gold,

The USA citizen can't fucking shoot, can't hit the side of the barn,

Its so fucking boring to hear losers talk about their gun's. Long ago JEFF COOPER said "Owning a gun, don't make you a shooter, anymore than owning a guitar makes you a musician"

A guy that can play a guitar and play sweet music knows how many years of toil it takes to develop this skill, and same for shooting, a guy that instinctively take out army of men is very rare, ... but a certainty with a trained man. But anybody knows that there is nothing more pathetic than a fool with a gun.

When I was a kid we used to joke about gun's and knives in hands of idiot's "Be careful, the guy that takes it from you, knows how to use it".

Tue, 10/22/2013 - 01:57 | 4078544 IridiumRebel
IridiumRebel's picture

Saturating threads make your posts become blather and worthless due to people not wanting to read your ideas over and over again. Less is more. In other words: LEARN TO SHUT THE FUCK UP AND KEEP IT SIMPLE STUPID.

Tue, 10/22/2013 - 09:29 | 4079140 banzai401
banzai401's picture

Luv you too, ...

Listen to your own words and abide by them ...

"shut the fuck up and keep it simple"

Tue, 10/22/2013 - 01:57 | 4078548 Tall Tom
Tall Tom's picture

How many do you think are ex military and veterans that support Gun Ownership? Do you think that the vast majority of Military Veterans own Guns and know how to use them?


I am not Ex-Military. But I was raised with Guns from a very early age. I went to Gun Safety classes and had my first Hunting License before I was 12. I was so damn good that I shot and gutted a bird. I didn't have to clean that bird as the .22 Caliber round gutted it. ( shot from a 22 Cal Rifle with a .410 Shotgun underneath...I knew that weapon like the back of my hand.)


Perhaps the Socialist Urbanized Youth may have not handled Firearms. I will not be too surprised at that. But my Nephews and Nieces have been taught and taken out shooting. I made that a CERTAINTY.


We, the Greedy Old White Men, kind of take care of that. The kids actually like it.


So just where in the hell do you get your


Besides...I am designing Homemade RPGs. I have not constructed any...yet. When I have the easily assembled RPGs I will not need a gun. Actually the design is not all that difficult. Copper Cones form the Shaped Charge and Armor Penetrating jet of Metal.


Candy Rocket Propellant is rather easy to make. 65% Sugar and 35% KNO3. It is quite LEGAL as I use it for Model Rockets. You cannot break the law, you know? Type in Candy Rocket in You Tube. See what videos appear. 


That is where I learned how to make FLYING ROCKETS...AS A KID. Any kid can do it. But I have been designing Flying Rockets as a hobby...FOR YEARS.


In fact I wrote a comment on the NRA (National ROCKETRY Association) Comment Section that got me placed on a Watch List. I got Strip Searched at the Airport as a result.  The BATF did not like what I wrote. That was back in 2003. They monitor the Web Content and have been doing that for many years. I know this FROM EXPERIENCE. 


And then Black Powder is not too difficult to make. Chemicals can be bought at the Hardware Store.






So you want to talk about Guns? How about EXPLOSIVES next time? Did you know that you can get a Nitro Glycerin power blast without ever having NG? It is so easy.

Tue, 10/22/2013 - 06:29 | 4078699 negative rates
negative rates's picture

I tried it with nitrogen and diesel fuel some years back. I soon after admitted to myself that I was more likely to blow myself up than any intended object. The mini 9v battery and a empty brillo pad used to create the spark when driven over by a tank igniting the 3day old fumin bomb was the initial attraction. Give it a try for kicks and giggles. 

Tue, 10/22/2013 - 09:27 | 4079134 banzai401
banzai401's picture

Listen to your self ..

"I was raised in a house full of guitars, and because of that I became eric-clapton, jeff beck, steven vai, and jimi hendrix by osmosis..."

same-same " because I was raised in a house of hairlips that had guns on the wall I am annie-olie and kil bill all rolled into one"

Boy I tell you tall-tom, ... it takes years of pro training to take a moron and turn him into a shooter, and if you think that the average hair-lip knows any thing about gun's that that just shows that you don't. But the fact is a MORON can never become a 'shooter' because he needs to have a 150+ IQ to begin with,...

I rest my case 99% of the folks on ZH don't have a fucking clue about guitars or gun's.

Tue, 10/22/2013 - 08:17 | 4078837 Vooter
Vooter's picture

LOL...well, let's see...marijuana is currently illegal in most you really think that if the government told everyone to turn in their pot that people would immediately march down to the nearest police station with bags of dope in their hands? Get fucking real...

Tue, 10/22/2013 - 11:23 | 4079541 Alexandre Stavisky
Alexandre Stavisky's picture

Compare and contrast the Audie Murphy and Sergeant York techniques.  Then pontificate again about your shooting skills.  Tactics, Strategy, and blind luck are far better equalizers.  All the shooting skills in the world work only in your line of sight and periphery.  Like a 25 year study of samurai technique is helpful when you are in a dinghy alone surrounded by cruisers and destroyers.  All bullshit.

Tue, 10/22/2013 - 00:40 | 4078460 joego1
joego1's picture

My new Obamacare will cost about $1200 per month.  What if instead I buy a gold eagle a month and just pay the $91 dollar fine how much medical care can I buy with my gold after the SHTF?

Tue, 10/22/2013 - 00:53 | 4078471 ebworthen
ebworthen's picture

TPTB have been crushing PM's and stocks intentionally; they are DESPERATE to devalue anything that is not digital and fiat.

The next step will be outlawing PM transactions and pulling an FDR.

You'll have to hold it until sanity returns.

Tue, 10/22/2013 - 06:31 | 4078701 negative rates
negative rates's picture

Sanity being the end of the world.

Tue, 10/22/2013 - 01:10 | 4078498 banzai401
banzai401's picture

Why do these PIMPS for gold just keeping doing it over&over?

Cuz its the only way they know how to make money.

The world is awash in GOLD, everyone that could BUY did buy and since 2010 folks have been selling their gold to pay the rent.

Sure in ASIA they continue to buy, and they're out of cash also.

Every hairlip that could buy gold has done so, and now the hairlips are un-employed, and at best they can buy silver coin, or maybe rounds of 22, but they long ago sold their assault-rifles for cash.

Gold is for rich-men, to have say 5% of your net worth in GOLD as an insurance, ... everybody that can has done so,

This call for GOLD is not for the US people, its just blogger-fodder dump on ZH by the ZH gods, for we know this is the only message SCHIFF has is 'buy gold the world is ending'

The fact is when the shit really hits the fan, people will want FOOD & BULLETS and their GOLD will buy very little, cuz it will NOT be what people want.

Sure if your on the RUN say in ASIA and hoofing from A to B, yes carry lots of GOLD, but in the USA where in the fucking hell are you going to run on foot with your gold?

Anyway fucking stupid, GOLD is for rich men, and 99% of ameriKKKan's are poor idiots, and god only knows the stat's on the ZH, but I'm sure it represents the average US citizen.

Tue, 10/22/2013 - 01:34 | 4078524 ebworthen
ebworthen's picture

Gold allows the middle and the poor to hide any assets and join the free shit army.

"Money?  What money?"

Food Stamps and SSD please.


Tue, 10/22/2013 - 09:33 | 4079159 banzai401
banzai401's picture

By DEFN the middle and the lower class don't have any benny-bucks,

Contrary to urban myth only lazy fuckheads join the free shit army, but that said that is still +90% of the USA public.

Given the average American has what less than $10K savings, ... I suspect that its not gold, ... and sure maybe a few red necks might have a little, I have long thought this entire 'talk' about gold, is like all else on ZH, just bullshit.

Like the talk about the letters to all of us that INTL TRANSFER abroad, I got those letters 2+ weeks ago, and majority on ZH didn't have a clue about what we were talking about, which just shows me that not only does the majority on ZH not have any GOLD, but they don't have an OFFSHORE account, or otherwise they would have gotten the fucking letter.

Bullshit talks and money walks, and the real money left the USA long ago.

Tue, 10/22/2013 - 07:09 | 4078742 StateofFraud
StateofFraud's picture

Search youtube for gold, bread, zimbabwe, asshat.

Oh, here, I did it for you

THAT was from 2009.

Tue, 10/22/2013 - 01:14 | 4078500 dojufitz
dojufitz's picture

A much higher Gold price Solves more problems and it creates.

Tue, 10/22/2013 - 01:22 | 4078509 banzai401
banzai401's picture

Many good books on gold.

No correlation between inflation and gold.

Most sky-rocketing like 1978 was peak-moronity "The USA dollar is collapsing", ...

Sure over the longterm GOLD will go up, ... but we're talking a long time.

About +90% of all rich guys made their money in real-estate the only people who get rich in GOLD are pimps at KITCO, or pimper's like SCHIFF writing pro-gold copy for nickels.

Gold has been deflationary since 2010, in the USA guys are more likely dig their gold up and sell it for food and booze, then to buy more.

The guys like SCHIFF must be as desperate as hell to find new suckers.

Another issue, and I'm seeing it and that folks are just getting bored and tired of the daily DOOM&GLOOM, you know in all cycles there comes acceptance, ...most us knew the shit would go down 2006 and it did, and MSM knew it 2007, but now its 5 years of MTG foreclosure and world moves on,

As much as we HATE the USA and the fucking USA dollar, it still represents the super-majority of global transaction, and its going to be a long fucking time before it gets replaced, sadly :(

Tue, 10/22/2013 - 06:46 | 4078719 auric1234
auric1234's picture

Gold has been deflationary since 2010

You fail to see deflation even when it's in front of your eyes.

When speed of gold drops to zero and the flow stops, no doubt you will understand what is money and what isn't. The hard way.


Tue, 10/22/2013 - 01:24 | 4078515 banzai401
banzai401's picture

Is this the RED-LIGHT for Schiff's DOOM&GLOOM career?

Is there some other product he could pimp? Maybe toy gold stocks? or penny stocks for silver? or maybe even penny-stock firearm companys,.... shit he needs a new gig.

Tue, 10/22/2013 - 02:07 | 4078554 jack stephan
jack stephan's picture

I used to rack a lot, even for me. I used to give presents to the hoods around my Complex to keep everything friendly and a little jovial. Kill time and just laugh at shit. fuck with hoodrats, nothing special.

Now the bloods I used to know all want blood. Them all. No middle, no hows anything going these days. Kids better learn fast, and adults find a small insurance policy near the leg. Get it, damn the price kids, after the last phone call I got.

More scared of living than dying that's how truly hopeless the situation is, almost as a mercy killing.

Tue, 10/22/2013 - 10:59 | 4079457 TradingTroll
TradingTroll's picture

Ah yes, the stupid people kill their neighbors instead of going after the real crooks in DC and NYC

Tue, 10/22/2013 - 02:11 | 4078559 Kina
Kina's picture

At the end of the day when there is total currency chaos and lots of rapidly falling knives the ONLY stabilising choice will be gold in some form.

The USA cannot stop printing without collapse and deflation so will print and print until the next black swan.




Tue, 10/22/2013 - 09:36 | 4079169 banzai401
banzai401's picture

You could say the same thing about all historical collapse.

But who gives a FUCK, if you own GOLD you belong to the -5% club, which means your hiding in a gold plated cave, and surrounded by hookers that want an ounce per hour for their pussy, and ten ounces for a can of food.

Better to become a MORMON while you still can, and take all your GOLD money and buy 2 years worth of food, and hide it good, and then WAIT and become a rich man.

Tue, 10/22/2013 - 02:19 | 4078563 Kina
Kina's picture

things go along the same as they are day after day and we say nothing will ever change until one day we wake up and they have.

people always saying nothing will or can change ... ie the USD... until one day it has all changed. 

History is full of people who were adamant nothing could change ---- USSR falls Berlin wall down--2008 crash---



Tue, 10/22/2013 - 02:21 | 4078565 Kina
Kina's picture

The demise if the usd as it is inevitable

Tue, 10/22/2013 - 03:36 | 4078600 Balvan
Balvan's picture

2011 was green light for gold as well if you asked Schiff. Keep stacking while it's still below $2000. It will be $5000 by 2012-2013. Buy Schiff's Valcambi gold bars, asap, dollar will become worthless paper any moment.

Tue, 10/22/2013 - 04:02 | 4078618 dark pools of soros
dark pools of soros's picture

BTC $200 again....   BTC $200 again.....

Tue, 10/22/2013 - 05:46 | 4078668 Hobbleknee
Hobbleknee's picture

Another recession?  Don't we have to leave the depression first?

Tue, 10/22/2013 - 05:54 | 4078671 Sufiy
Sufiy's picture

Eric Sprott: "Gold And China To Dominate The World."

Eric Sprott is very bold with his call for Gold at $2400 next year. He stands his ground and continues to talk about overwhelming demand for physical Gold from China. According to Eric, investing in the right Gold and Silver equities provides the opportunity of a life time for wealth creation now.   Now after the Debt Ceiling can is kicked down the road for a few weeks without resolving anything, investors will be back to the analysis of the real economic situation. We can forget about Taper until the next year at least with the looming circus entertainment Debt Ceiling Increase 2.0. Default is avoided, but the damage is done. We are very positively surprised by the amount of US Dollar negative articles in the mass media these days. The story about the End of the Reserve Currency of Choice - US Dollar is making its way to the surface now.   Last week US Dollar has printed the closing below the all important 0.80 level and is now below the 200MA. Gold on its part is in the break out mode, finally and has painted the set of very interesting charts.

Peter Schiff On Gold Catalyst: Janet Yellen Exposed - The Truth Behind the Myth

 Peter Schiff separates truth from the mass media hype about Janet Yellen's real track record. As we have discussed before, her core beliefs are even more neo-keynesian than those of Ben Bernanke. The new play book for the FED is written by Michael Woodford and it will be even more fundamentally positive for the Gold. We can expect continuation of "pro-growth policies" with very little regard for the created bubbles along the way.
  Peter was right about the Housing Bubble in 2006, he was right about the "Tapering" in September, what will happen if he is right again with his Call on Gold? We will provide his discussion on Gold and our entry on Michael Woodford to dig it out more for interested.

Tue, 10/22/2013 - 10:43 | 4079394 TradingTroll
TradingTroll's picture

Eric is sitting on a boatload of underwater gold and silver juniors.

Tue, 10/22/2013 - 06:38 | 4078712 XXL66
XXL66's picture

Owning GOLD or not is just like having a fire insurance or not. Because more and more people realize that 'children' are playing with fire, the insurance fee is just getting more expensive every year. Luckely i signed my insurance in 2008, thx to Roland Vandamme, the Peter Schiff of Belgium. He signed his in the previous century.

Tue, 10/22/2013 - 06:52 | 4078726 dr_doom
dr_doom's picture

on a philosophical level I fully agree with schiff. but in a way it gets quite boring to repeat this type of comments again and again and again on zerohedge. quite frankly, for those who bet on precious metals or use them as insurance instruments wouldn't it be more relaxing to step aside and watch the spectacle from the sidelines? the fireworkes created by the central bank masters has only begun and will most likely continue for quite a while. personally, I continue to add to my physical holdings regularly and don't bother too much about the current price levels. Eventually it will be of use, but in the meantime, stop lamenting all the time why gold is moving in the wrong direction.

Tue, 10/22/2013 - 06:53 | 4078727 kurt
kurt's picture

I listened to a 40 minute interview with Schtiff and finally figured out he's a inveterate, pedantic libertarian of the darkest, Randian heartless murder-death-kill reptilian robot-freak shark.

What sealed it? People who payed into social security were stupid because they believed they would one day be covered. They were stupid because they believed the contract and trusted in the concept.

Oh that, and he bleated his taxes "are killing me already!" Fuck you fucker. 

Tue, 10/22/2013 - 08:02 | 4078800 Vooter
Vooter's picture

"I listened to a 40 minute interview with Schtiff and finally figured out he's a inveterate, pedantic libertarian of the darkest, Randian heartless murder-death-kill reptilian robot-freak shark."

Maybe. But that doesn't mean he's wrong...

Tue, 10/22/2013 - 08:43 | 4078952 bombdog
bombdog's picture

Can you say people paying into any pyramid scheme aren't stupid? People are stupid get over it. Maybe they don't deserve it, but if you live in a supposedly free country you have greater responsibilities, including not becoming lazy, slavish and stupid when it comes to your rights.

Tue, 10/22/2013 - 20:04 | 4081299 kurt
kurt's picture

Sacred Trust





Look into it, dead eyes.

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