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Gold "Speculation" Drops To Record Low

Tyler Durden's picture


While the last two days of relative excitement in the precious metals are noteworthy in their bucking-the-trend of recent months, there is perhaps a much more critical 'trend' that may finally allow the demand for physical gold to peer through the veneer of synthetic paper pricing. As JPMorgan notes, speculative positions (defined CFTC net longs minus shorts) have dropped to record lows in the last few weeks. With ETF gold holdings back below 'Lehman' levels and gold coin sales elevated, perhaps the Indian government's (and most of the Western world's Feds) hope for the death of the precious metals market is greatly exaggerated...


Gold Spec positions at record lows...


"Paper" Gold ETF Holdings at pre-Lehman crisis levels...


As "physical" Gold coin sales are on the rise again...


Charts: JPMorgan


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Sat, 01/04/2014 - 19:47 | 4300488 Motorhead
Motorhead's picture

Gold, bitchez!  (But don't confuse me with the wankers over on King World News.)

Sat, 01/04/2014 - 19:51 | 4300511 Motorhead
Motorhead's picture

I hope so...long-term charts look really bad, and I'm not totally convinced that we've seen the lows just yet.  We shall see.

Sat, 01/04/2014 - 20:15 | 4300568 Thomas
Thomas's picture

I don't mind the correction--I think it is temporary. I do, however, find the wankers who don't even know what gold is made of cranking on our sorry asses for being complete idiots. Those spiteful mothers are gonna eat it, IMO.

Don't forget: the markets can stay solvent longer than you can stay irrational (or somethin' like that).

Sat, 01/04/2014 - 20:17 | 4300584 Soul Glow
Soul Glow's picture

Investors think short term; year to year, month to month.  Gold bulls think over periods of decades.  And patience is the ultimate virtue.

Sat, 01/04/2014 - 20:27 | 4300603 greatbeard
greatbeard's picture

>> Gold bulls think over periods of decades.

That really depends on the age of the bull.

Sat, 01/04/2014 - 20:27 | 4300608 Soul Glow
Soul Glow's picture

I had an opportunity to sit down with my old next door neighbor a month ago.  Many of you know his name, but I didn't ask for an interview and so I am not going to name him.  He was one of the major mining news letter writers in the industry for over a few decades, he has traveled and shared hotel rooms with Sinclair, Pierre Lassonde, and other famous bulls.

He hadn't known that I too have been in his industry for the last five years, and the conversation was kept basic as he searched to see how much I knew.  When he realized I was up to speed he instead began telling behind the scene stories of these guys and what they were doing with their money; from the man who owned $75m worth of gold who was asked repeatedly to loan it to the Fed, to his friends who are shutting down their mines due to rising operation costs.

The conversation concluded with us both admitting we have no idea when the pop stand will blow, but that we know the day is approaching.

Here's to the gold bulls who stay in the rodeo!  May we never lose track of the truth!

Sat, 01/04/2014 - 21:19 | 4300729 Babaloo
Babaloo's picture

"The conversation concluded with us both admitting we have no idea when the pop stand will blow, but that we know the day is approaching."

Yeah, did you ask him how long he has thought "the pop stand will blow?"

I'm pretty sure it's been a hell of a long time and he's been wrong for a hell of a long time. So why would you believe him now?

Sat, 01/04/2014 - 21:52 | 4300785 Soul Glow
Soul Glow's picture

Like I said, he wrote a mining journal.  No where in those journals did he predict any global events or such, he was focused on extraction, margin, etc.

As for his personal views, well, we are all entitled, but he is no alarmist.  He has been putting his money into biotech lately, not gold.

Sun, 01/05/2014 - 01:51 | 4301190 Bay of Pigs
Bay of Pigs's picture

Charts above by JPM?


FUCK OFF. Embarrasingly stupid and ridiculous.

Sun, 01/05/2014 - 11:18 | 4301580 N2OJoe
N2OJoe's picture

In the late 1400's some people believed the world was round. The scientiest of the day told them they were wrong for so long, why would anyone believe them now?

Sun, 01/05/2014 - 18:21 | 4302606 CallTheBluff
CallTheBluff's picture

Is anyone else noticing that the first chart could go negative?  It's captured for just long enough to never show any time period in which there were more shorts than longs, because what like, that can't happen?

Sat, 01/04/2014 - 20:23 | 4300602 greatbeard
greatbeard's picture

>> Those spiteful mothers are gonna eat it,

Good lord I hope so.  #1 rule, keep your mouth shut.  Unfortunately I am (was) close to my brother, who's close to his bitch wife.  Fucking gloating cunt.  If the bastards ever get off the price I swear I'll not make so much as a peep about AU again.  I might not be able to fully conceal the smug grin, but I'll never make so much as a peep about AU to anyone, ever again. 

Sun, 01/05/2014 - 08:27 | 4301378 GetZeeGold
GetZeeGold's picture



Cat dropped out and tuned out.....but he seems to be really interested in gold.


No.....I don't know why.

Sat, 01/04/2014 - 21:47 | 4300777 Greenskeeper_Carl
Greenskeeper_Carl's picture

i dont mind either. I am less than 30, and i plan on accumulating gold and silver for a long time, and i do not care what the price does day to day. they can keep it this low for years for all i care. I feel like I am getting a once in a life time opportunity to buy physical at these prices, as this is how i save money. losing 40% on miners is depressing, but on a long timeline, i know i will come out ahead.

Sun, 01/05/2014 - 06:55 | 4301344 MeelionDollerBogus
MeelionDollerBogus's picture

honestly, you can save a bundle long-term dumping the miners & getting the metal in hand.
I know I will be able to barter silver maples (already have), not mining shares, for needed physical resources.

Considering what miners do vs ETF's if you still feel like chasing paper, might I suggest a low share price of 2x ETF HZU (tsx) or AGQ (decently low, American) or AGQ options.

Even the 2016 strike 30.00 contract on AGQ (no options for hzu) will probably pay off in the area of x100 within this time frame. If not it's a loss but it's a small one. No margin, 1 contract. Just a thought. Even to pay off at x10 as the "10 bagger" empty promise of miners, it would still be a cost of around $250 to get in, and a target of say, 66=AGQ which lines up with silver=agq0.5 x 171/35 = 39.69 USD/troy oz.

Ask yourself what silver miner will return that with a silver price at 39.69 from today's prices. None.

Sun, 01/05/2014 - 07:31 | 4301352 samcontrol
samcontrol's picture

does silver need to be at $200 for that X100 in 2016 ???

I see more your $40 silver scenario,, I am hoping for$50 by 2016.

I have a few miners I might trade in for your thought. Maybe i,ll start with PZG.
Other candidates would be EXK and AG ,tax involvement in Mexico and all.

Mon, 01/06/2014 - 04:55 | 4303821 MeelionDollerBogus
MeelionDollerBogus's picture

back in 2010 I missed pzg on its big pop up. Question is, why would this miner get another such pop...? Unless everyone gets their boat floating instead of accidentally dumping all their gold, why pzg?
Missed it once, won't come again, is how I normally look at it.

Mon, 01/06/2014 - 06:51 | 4303887 samcontrol
samcontrol's picture

pzg is not really mining...but sitting on some...

Sun, 01/05/2014 - 17:57 | 4302521 Non Passaran
Non Passaran's picture

Right, but also very few will go to zero.

Mon, 01/06/2014 - 04:47 | 4303818 MeelionDollerBogus
MeelionDollerBogus's picture

why not? Countless miners go to zero (very small time) and quite a lot screw up too. You only get so many tries digging at dirt with no gold in it before you're bust. Similarly if you find gold of a poor grade it's only economical until the re-sale price drops and even then if it doesn't but energy prices spike, suddenly there's a related problem.

I'm pretty sure if you bagged a basket of 40 mining shares you'd see 10 go bust, 4 do very well for a while & the rest may languish. Picking the right amount of each so you don't lose it all is not easy. Dare if you want but I wouldn't understate the risk.

Sat, 01/04/2014 - 20:14 | 4300580 Soul Glow
Soul Glow's picture

The long term chart looks bad?  You mean the one that starts at $35?  Or the one that starts at $250?

Sat, 01/04/2014 - 20:47 | 4300623 akak
akak's picture

LOL!  But quite on point.

The idiots who are supposedly 'sophisticated' investors but who still use nominally denominated multi-decade (or even multi-year) charts never fail to crack me up.  Such as those moronic and/or disingenuous cretins who point to a chart of the DOW over a 30 or 50 or 100 year timeframe --- as if the US dollar upon which the DOW is based has not been depreciating over the given period, moreover ignoring the fact that there is no single "the DOW" in any case, as the DOW has been and continues to be redefined as older, sagging stocks are yanked out of it to be replaced by vigorous up-and-comers.  It would be analogous to taking one's academic record and dropping out half or three-quarters of all one's lower grades, then averageing the rest and filling in the voids thereby created to fallaciously boost one's GPA.

Sat, 01/04/2014 - 21:10 | 4300706 TheFourthStooge-ing
TheFourthStooge-ing's picture

But hey, the inflation rate is zero when adjusted for inflation. Somehow this is very something.

Sat, 01/04/2014 - 22:40 | 4300899 akak
akak's picture

That is vigorously that and also upping the progrational nib of the crust of it to the limit and more than.

But hey, when the US 'american' monolizing of the inflationary offuscation means is the game, might as well jump in with both feet in mouth.  The mettle of the parangongs of blobbing-up is the mattering thing.

Alas, alas, three roadside squats alas, just have to bear with narrower TP. 

Oh wait, not even.

Sun, 01/05/2014 - 11:25 | 4301596 SAT 800
SAT 800's picture

Exactly. A typical modern idea of "long term". Ludicrous.

Sat, 01/04/2014 - 20:51 | 4300591 GrinandBearit
GrinandBearit's picture

Your own contrary signal = BUY

Sat, 01/04/2014 - 20:29 | 4300593 philipat
philipat's picture

Agreed, BUT, what makes me believe that this MAY be a double bottom is that they have no more physical Gold to play with. The sustainability of the naked paper short game does require that some physical Gold is available to back it. And there is none. Even the ETF's (GLD etc) have been stripped down to the remaining strong hands who are not going to be conned.

The real danger, IMHO, is that JPM, which has built up a long corner in Gold, will use that position NOT to make another $3 Billion on the way back up but to start selling again into another down leg. With the Fed/BIS behind them, they don't have to worry about "paper losses" because Bennie's printer will produce the requisite offset to the "directional trading losses by clients".

Sat, 01/04/2014 - 20:37 | 4300624 Squid-puppets a...
Squid-puppets a-go-go's picture

but there's only so long western powers are gonna let the flow go east. Sooner, rather than later, they have to slam the gate shut with a reset, or they will lose the option to resolve their own (western) debt with a gold reset

Sat, 01/04/2014 - 20:46 | 4300642 philipat
philipat's picture

The vaults are already empty. Ask Germany.

Sat, 01/04/2014 - 20:39 | 4300630 unwashedmass
unwashedmass's picture


they may have a corner on the NY Comex market, but.....

given the demand for physical, they got enough to play games for one more or so......not much more....

if they are stupid and arrogant enough to try it.....

cause the Chinese will call their bluff......and the Indians and Russians will be right behind them.....

sell us that long paper gold, Jamie....sell it to us.....and then we all will get to watch you go all aquiver when everyone shows up .....

and demands delivery, and you really don't have it.....

and there's nothing left to steal from GLD......

just try it. 



Sun, 01/05/2014 - 00:44 | 4301104 PontifexMaximus
PontifexMaximus's picture

That paper gold hldg has to be halfed down to 2008 levels, "wrong" holders to be squeezed out of the playground, then gold will be clean and holding phys gold wil be the name of the gsme. But this crucial process has to happen, per aspera ad adstra!

Sat, 01/04/2014 - 21:10 | 4300700 TheFourthStooge-ing
TheFourthStooge-ing's picture

Made me laugh. Technical analysis in a rigged market does not correspond with reality. So FRN citizenish...

A double bottom at 1180 looks in place. Expecting a big move higher. 10 year is getting turned up too.

Paper peddling pariahs and their poltroonian purchasers are looking to get a double bottom penetration. Holders of vaporous "registered" claims on "vaulted gold" can expect two in the tailpipe as they learn of their ownership of a gold time-share (which may have been shanghai'd off to ... Shanghai). Those whose investment is in "allocated" can look forward to a crowd both in front and in back as they learn about rehypothecation via DVDA (the very hard way).

The only thing the Gold Spec chart tells us (and it's important info to know) is that it's a grand opportunity for Blythe and the boys to go on another spree of ass raping the paper faithful. They know they can't continue this pattern forever, so if they think it's the last time they'll be able to get away with it, expect a rampage.

Tue, 01/07/2014 - 02:30 | 4301339 MeelionDollerBogus
MeelionDollerBogus's picture

"double bottom"
isn't technical analysis, it's balderdash.
Technical analysis requires equations with solutions. Graphs showing how the equations apply are important too .

It's the mathering thing for blobbing up 'predictions' in chartizenism.

currently ln silver = gold x 3/2635 + 1297/810 on trend for past 12 months and agq = 8/191 x silver2 on trend though it's fairly close to use 24: USD 20.122 /24 = 16.87 though actual AGQ price closed at 16.93.

Sat, 01/04/2014 - 22:31 | 4300882 Silveramada
Silveramada's picture

I said that back in June/July and I think & hope we are right, interesting will be the actions of physical market in January when sales should skyrocket...



Sat, 01/04/2014 - 19:50 | 4300516 SRSrocco
SRSrocco's picture

The paper price of gold can be manipulated for quite a while. However the fundamentals always kick in.

Sat, 01/04/2014 - 23:49 | 4300981 jomama
jomama's picture

^best article on gold i've read in quite some time.  i love me some stacking inspiration.

found this vid in the comments.  very good as well. 

The Gold Must Flow!


Sun, 01/05/2014 - 00:36 | 4301098 matrix2012
matrix2012's picture

Thanks SRSrocco for the down-to-earth article!

Time has evolved that it seems some part of mankind already abandoned the physical metrics and instead being blinded with all the intangible and paper-based ones... some day they'll all be severely penalized for their utmost ignorances.

Sun, 01/05/2014 - 17:50 | 4302502 Non Passaran
Non Passaran's picture

Silver/oil: you could say silver is being slammed while oil isn't because of QE there is artificial demand for oil, but less so for silver.
That explains the divergence, I guess.

Nice work!

I'm long the both metals.

Sat, 01/04/2014 - 19:52 | 4300524 Leonardo Fibonacci2
Leonardo Fibonacci2's picture

31-12-2014  spot gold will be at $1400

Sat, 01/04/2014 - 20:11 | 4300567 Soul Glow
Soul Glow's picture

31-12-2014 spot gold will be at $14000.

Two can play that game.


Sat, 01/04/2014 - 23:48 | 4301027 JimS
JimS's picture

I'll put my "money" on $3625.00, now we got 3.

Sun, 01/05/2014 - 17:28 | 4302428 Non Passaran
Non Passaran's picture

That'd be fine, but what's important is to keep stacking.
The price in fiat is not real.

Sat, 01/04/2014 - 20:15 | 4300571 Serfs Up
Serfs Up's picture

Dudes...wheres my chart of physical sales in kilo bars?

Coins are nice and everything, but they are misleading chump change in the global scheme of things, if you catch my drift.

Sat, 01/04/2014 - 20:40 | 4300620 AUD
AUD's picture

True. The real sign that the 'evil day' is approaching is when bullion banks, bidding for themselves & their clients, are desperately bidding up the price of kilo bars past the price where suppliers, such as mints, will accept their credit.

That is, there will be a increasing spread between bullion bank credit & physical gold, since the way it works now is that gold is supplied to the bullion banks & the suppliers get credit to their accounts with the bullion bank.

Sat, 01/04/2014 - 20:33 | 4300622 midtowng
midtowng's picture

It looks like the ETFs can unload a bit more, but not much more. Otherwise they will lose control over the gold market and let physical holders take over.

Sat, 01/04/2014 - 21:18 | 4300726 Squid-puppets a...
Squid-puppets a-go-go's picture

@ motorhead -Gold, bitchez!  (But don't confuse me with the wankers over on King World News.)


"the important thing, Eric, is that your name, Eric, is inserted liberally throughout any, you know, Eric, opinion peice about the Eric Gold Eric Industry Eric"

Sun, 01/05/2014 - 00:52 | 4301112 Diablo
Diablo's picture

Ahhh yeeesss...the same ole ZH playbook to rile up the paranoid sheep. if the bankster/JPMorgan/Goldman manipulation stories dont work, then move onto China/Russia/Swaziland is lining up to buy gold stories. and if that doesnt work move onto the spec longs/shorts/commitment of traders reports. (whatever happened to all those short squeezes in silver that ZH was hyping for the past couple of years...hmmm, didnt exactly work out as planned ehh?  gee, thats shocking!!!)

Next up...dust off mike maloney, jim sinclair, peter schiff, max keiser, king world news, or some jackoff living in exile in argentina squawking about some end of the world garbage.

Rinse, Repeat. the goldturds will buy anything.

Sun, 01/05/2014 - 00:56 | 4301123 ronaldawg
ronaldawg's picture

Yeah but I still have my physical not some piece of worthless piece of paper or fiat. 

Sat, 01/04/2014 - 19:46 | 4300490 Tegrat
Tegrat's picture

Both UGL and NUGT have both been looking good for a short term trade.



Sat, 01/04/2014 - 19:53 | 4300520 Xibalba
Sun, 01/05/2014 - 11:29 | 4301603 SAT 800
SAT 800's picture

Yeah, really. Which one of you really believes Silver is going to continue selling for 1/60 of the Gold Price? Nobody, right? Well, then, buy it.

Sat, 01/04/2014 - 19:58 | 4300531 RaceToTheBottom
RaceToTheBottom's picture

Let'er rip.!!!!

Sat, 01/04/2014 - 20:03 | 4300542 max2205
max2205's picture


Sat, 01/04/2014 - 20:06 | 4300553 Seeking Aphids
Seeking Aphids's picture

No one can know given the ability of certain powers that be to control the paper hope is that they have sold so much phyz that they won't be able to cover demand going forward if it continues to grow as I expect it much gold would it take if every Chinese person bought 1oz on average?

Sat, 01/04/2014 - 20:14 | 4300581 Seeking Aphids
Seeking Aphids's picture

Around 30k metric tonnes, correct? That is a lot of what if the average Chinese person wanted to own 2 oz of gold? What would that do to the pog? A little imagination goes a long way when you are looking at 1Billion people..........expect to see shortages in nuts, coffee, cocoa going forward as the average Chinese person discovers these products......

Sat, 01/04/2014 - 20:13 | 4300563 duncecap rack
duncecap rack's picture

Could it be a lot of shorts being taken out against a huge long by JPM? if it is it could be very bullish. Deliver bitchez.

Sat, 01/04/2014 - 20:13 | 4300565 bobert
bobert's picture

The local silver dealer in my area has added fifty cents to spot for his purchases whereas previously he paid only spot.

Short of supply I guess.

Sat, 01/04/2014 - 21:01 | 4300677 edifice
edifice's picture

Probably self-made shortage.  You should see my dealer; he has silver coming out of his ears!!

Sat, 01/04/2014 - 20:15 | 4300575 holdbuysell
holdbuysell's picture

FOFOA weighs in with a new post with a very interesting perspective.

2014: Year of the Rains

Sat, 01/04/2014 - 21:55 | 4300801 philipat
philipat's picture

I am still of the opinion that "Freegold" is intellectual masturbation. Gold is money. Period (As Obozo would say).

Sat, 01/04/2014 - 22:32 | 4300888 holdbuysell
holdbuysell's picture

I found FOFOA's post interesting in that it discusses how breaking points historically have happened when the price of gold approaches the mining cost, a similar conclusion to a recent Mylchreest report.

But FOFOA goes further in analysis on why that price point is critical for the flow of gold to occur.

The chart on trade deficit vs. net foreign purchases of treasuries (flow) is telling. It's a must read just to understand FOFOA's perspective on why something's changed. Foreigners are not buying the US debt.

In all, both help triangulate on what appears to be a (historical) signal in the data that's rising above the noise.

Sat, 01/04/2014 - 22:39 | 4300902 DoChenRollingBearing
DoChenRollingBearing's picture

+ $55,000 to anybody I catch mentioning FOFOA.

Sun, 01/05/2014 - 12:28 | 4301721 Hulk
Hulk's picture


Sun, 01/05/2014 - 12:32 | 4301722 Hulk
Hulk's picture


Sun, 01/05/2014 - 12:32 | 4301723 Hulk
Hulk's picture


Sun, 01/05/2014 - 12:29 | 4301725 Hulk
Hulk's picture


Sun, 01/05/2014 - 12:30 | 4301727 Hulk
Hulk's picture


Sun, 01/05/2014 - 12:30 | 4301729 Hulk
Hulk's picture

Dude, YOU OWE ME !!!

Sun, 01/05/2014 - 15:39 | 4302112 akak
akak's picture

Made me laugh!


+1 for blobbing-up the humor means in a very mattering way.

Sun, 01/05/2014 - 17:27 | 4302416 Non Passaran
Non Passaran's picture

And 55 bitcoins to the person who managed to read a post there without taking a break!

That's all great and sometimes even makes sense, but we need a bank or country to go seriously bust otherwise we'll all end up using FedCoin.

Sat, 01/04/2014 - 20:18 | 4300589 Xibalba
Xibalba's picture

A lil birdie tells me that dealers are robbing people in Brisbane.... 

Sat, 01/04/2014 - 21:03 | 4300691 fijisailor
fijisailor's picture

Either them or the delivery services.

Sat, 01/04/2014 - 21:01 | 4300673 q99x2
q99x2's picture

Just got a message from Fonestar

Bitcoin: Last:$941.99

Sat, 01/04/2014 - 21:15 | 4300717 satoshi101
satoshi101's picture

Google 'google news' right now for "Bitcoin", there has never been a more diverse set of MSM news about bitcoin all positive, no doubt that this thing is now orchestrated to bring more to the pool, as its being legitimized.

More telling is that BTC volume is low, but new idiots keep buying the BEANIE-BABY, about as quick as the die-hards are getting out.

Given that the exchanges don't let you out, you can't have a BTC run its not possible, when you can only pull out $1k/day.

So now BTC volume is low on entry/exit, but the price holds, and this game can go on forever if the MSM keeps telling old people that BTC is the next beanie-baby. Meantime India/China have shut it down, but in the west its all good, IMF good.

Now every asshole on the planet has endorsed BTC, that should tell you something, its now AIPAC/IMF certified.

BTC is now KOSHER.


Sat, 01/04/2014 - 22:29 | 4300883 Curiously_Crazy
Curiously_Crazy's picture

There is still a shitton of CNY flowing into them though:


Sun, 01/05/2014 - 11:39 | 4301625 TheHound73
TheHound73's picture

Fonestar update.

Bitcoin: Last:$1020

Sun, 01/05/2014 - 17:18 | 4302400 Non Passaran
Non Passaran's picture

The more I think about that site the more it seems like bullshit.
What the fuck do those numbers even mean?
When Bitcoin was collapsing the fucking thing was still showing fiat "leaking". As if they're mining it faster than it could crash. I call bullshit.

Sun, 01/05/2014 - 17:56 | 4302511 TheHound73
TheHound73's picture

For every buyer there is a seller.

Sun, 01/05/2014 - 04:52 | 4301302 MeelionDollerBogus
MeelionDollerBogus's picture

I tried doing video & image searches for anything making fun of bitcoin.
I couldn't find a fucking thing.
That's just not right.
The Internet is filled with diversity. No matter the right or wrong, one side shouldn't simply cease to exist.
That's fucked and a grand sign this entire thing is rigged.

Mon, 01/06/2014 - 04:58 | 4303825 MeelionDollerBogus
MeelionDollerBogus's picture

Ya... I watched Rawdog & Cory C years ago. He kind of flips his positions a lot & erases any videos that make him look wrong as opposed to retarded, which he finds entertaining.

Sat, 01/04/2014 - 22:01 | 4300806 1stepcloser
1stepcloser's picture

Just got a message from Edward Snowden,,,Stuxnet coin pricing is only available via the CIA and NSA.. 

Sat, 01/04/2014 - 21:10 | 4300693 satoshi101
satoshi101's picture

Who Buy's BTC? Who Buy's 'Paper Gold' Etf or Etn? Fools

Fools and their money always depart.

Most of the pimps on ZH got their BTC's for free, me thinks that nobody here paid a nickel for a BTC.

Me thinks that nobody here bought any ETF gold, albeit schiff and the advertisers continue to assume the gulible with money are here,


Paper Gold and virtual currency, same-same as burning your money in a furnace. Well at least GLD is liquid and can be instantly traded, unlike BTC which has no exits.


I think most here get gold wrong, but its not my business to educate anybody, I see here in Asia that CASH is slowing down, and soon folks will have to start returning their gold to the gold-shops.

In the west its DEFLATION and people have been selling to eat. For a while the asians were buying on the low. There is nothing to support gold, other than a black-swan, which isn't on the horizon. High $1600, low $800. Trend now down, SHTF maybe to $1600.

Insurance? Hell yes, odds of gold going to $5k/oz? About the same odd's as the NSA closing down, and return the USA to the People. Not a chance in fucking HELL.


Sat, 01/04/2014 - 21:30 | 4300736 Squid-puppets a...
Squid-puppets a-go-go's picture

Nothing to support gold? WTF? What, you think peoples faith in fiat is increasing? 

Sun, 01/05/2014 - 04:50 | 4301301 MeelionDollerBogus
MeelionDollerBogus's picture

-1 for the "no go" on 5k gold.
+1 otherwise.
Gold will go far above 5k purchasing power in today's dollars.
So will copper, silver, canned food & a lot else that isn't digital.

Sat, 01/04/2014 - 21:04 | 4300696 Shibumi2
Shibumi2's picture

Wasn't the flight og Gold from F Knox to France, in response to deficit spending to finance the vietnam war, responsible for the clusterfuck resulting from the decoupling of AG/USD?


That was a one shot deal, and the shot has been fired. There is no longer a decoupling option.


The question thus remains if gold is relevant in the global economy any longer. If the answer is YES, than the USD will become worthless in short order...roughly corresponding to the rise of the next reserve currency.

It is no secret that the Yuan is priming for that role. If the Chinese are able to tie their currency to a gold conversion than the global petro economy will shift to the east, coinciding with the rise of their manufacturing monopoly.


It really isn't IF as much as WHEN. We are then left with CAF's SLOW BURN.


I'm not sure one can profitably time a trade the successful outcome of which is tied to the destruction of an economy and its people.

Sun, 01/05/2014 - 04:05 | 4301275 Squid-puppets a...
Squid-puppets a-go-go's picture

i would add that in such a delicately interlaced matrix, even the apex of illuminati powers would have an enormous undertaking to dictate the timing of the fruition of such plans

Sat, 01/04/2014 - 21:11 | 4300707 Sufiy
Sufiy's picture

Frank Holmes: Gold Stocks - What to Expect in the New Year

Frank Holmes starts new year with the very insightful outlook for Gold and Gold miners. China buys record amount of Gold in 2013 and UK and German authorities are investigating Gold market manipulations now. Chances are that this manipulation can go forever with Gold flowing by tons from the West to the East. Chart above from KWN demonstrates that Gold is in the most oversold sate in its history now.

Sat, 01/04/2014 - 21:53 | 4300791 Yardfarmer
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a profound indication of the inflection point we are presently reaching in the media management of perception as regards the economy and the metals is reflected in the notable interivews with RIckards and Grant by the talking heads at MSNBC and CNBC corporate/government organs. It is interesting to note the peculiar avidity which these sock puppet cheerleaders for the greatest recovery gleefully attack,interrupt and acutally shout down, and otherwise seek to discredit the likes of Rickards and Grant. Liesman's performance was particularly obnoxious but really couldn't compare with CNBC attack dog Brian Sullivan who was particularly and ridiculously adamant comparing Au to "an old mule" and then apologizing to mules because "they at least have a purpose". The sheer volume of the noise at this point means that the Orwellian ministry of truth is pulling out all the stops in an attempt to fabricate the narrative of recovery where this is none, and laud the disastrous destructive and grotesque economic distortions of the QE as the salvation of the republic and the world financial system. It will be a great day(and that day is coming) when these media clowns are silenced with a mouth full of crow. or as the inestimable Mr. Grant states "the Fed can change how things look but the Fed cannot change how things are." 'nuf said.

Sat, 01/04/2014 - 22:47 | 4300920 akak
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Sun, 01/05/2014 - 12:58 | 4301793 Spumoni
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Excellent comment, but one problem: eating crow requires a semblance of a conscience. Nobody working for LSM these days has one, nor would they be hired if it was found that they did.

Sat, 01/04/2014 - 22:11 | 4300829 adventure007
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Keep Printing - God Speed, Export the $, it will come back to bit your ass 

India Inflation Inferno -

Sun, 01/05/2014 - 00:18 | 4301073 highwaytoserfdom
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The collectivist Margin requirements thugs think they can control Mr Market .  time will tell as re inflating housing and now student loans...   I seem to remember Japan had top banks in there disaster...  Two lost decades and they were not playing GI Joe occupiers.

Sun, 01/05/2014 - 01:33 | 4301173 fijisailor
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The Chinese believe that Soros is a tool for conducting economic warfare against Asia.

Sun, 01/05/2014 - 06:55 | 4301342 matrix2012
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And if one does know about the Chinese author: Song Hongbing and his famous three sequels of "Currency Wars", one will wonder less or have none at all upon that matters.

Sun, 01/05/2014 - 11:50 | 4301643 exartizo
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gold is going to $900.

at which point it will be a good buy.

Sun, 01/05/2014 - 12:38 | 4301738 bwh1214
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I had a typical debate on a yahoo gold bashing story, it goes on and on below.  For some reason it really bothered me because the guy I was debating clearly knew some stuff, ie econ PHD's don't usually pay for thier degrees, but he seemed irrational on other issues and for the life of me I could not get him to explain.  Sorry to the ZH moderators I will understand if you pull the post but I wanted to get some comments from the ZH's.  Its a long trail but I wanted some insight.  Am I being naive that I can teach my self econ through reading?  Are my points off the mark?  Let me know what you think guys.





"your only defense against the feds money printing madness is Gold and Silver."
Why would that be? If you are worried about inflation, there are tons of ways to hedge that which are much stronger hedges than metals. Frankly, using a 30% vol lightly correlated asset to hedge 2% vol inflation is such a novice error in finance it makes me chuckle. If you believe in inflation, things like long bond puts are much better hedges and you can even hedge inflation indexes directly. This point is simply complete finance naivete.

" This is an excellent entry point for either as they have corrected and based to the lowest price it will ever go in my opinion with 5000 or more to be seen in coming years."
Derivatives for $5000 gold in the next few years are priced at 0. You could get as many as you want just for the transactions costs of the trade. Nobody with any real money thinks this is possible.

" It is the best way to protect what wealth you may have from the dangerous and endless money printing that is diluting your dollars."
Only if you have never heard of derivatives.

"In addition to Physical which is best"
Only if you require privacy. In general coins around your house are complete amateur hour with super high transactions costs, high maintenance costs, and nasty taxation problems.

" I like Hecla mining at this time it produced 26% of all the SILVER mined in the Unites states last year and has massive reserves "
Hmm...those massive reserves don't sound too bullish fro silver to me.

" Silver is an industrial metal heavily used in many applications"
Am excellent indicator of confusion is someone buying precious metals for financial collapse and their industrial uses. Silver's industrial uses have been declining over the years relative to the size of our economy as we no longer use it for film processing.

The reason you think all this stuff is that you don't know anything about finance or economics. You have never read a book or taken a class in either. You have never worked in finance. You have never studied for any finance exams. Etc, etc..



Here are my thoughts from another artical about your education and career.

There is another point about these finance and economics PHD’s and it is the reason it is pointless to argue with a classically trained Keynesian economist and the like. They are not educated, they are indoctrinated. To get a PHD in economics from a prestigious school they will have to spend 300k for their education and 7 years of their life where they could have easily earned just as much. Then they go on about their career using what the “learned” building on the economic system we have in place. To then come to the conclusion that what they learned was incorrect would be to admit that even the education was for naught and they wasted 600 thousand dollars. People have killed themselves over losing less than that, so to come to that conclusion would be a major blow to their physiological wellbeing.

I have been self-taught in economics, similar to Ron Paul, and believe my, and the Austrians, views to be correct. But a well-educated Keynesian Economist probably doesn’t have the ability to admit that they are wrong or even listen to the point of view of some one that is self-taught but there isn’t anyone else to confront them because there are very few schools offering Austrian style economics degrees.

Now take it to the next level, they get this education, completely vest their careers in this ideology, and then the top guys have implemented it for the world economy. To admit they are wrong would be to destroy the monetary, economic and financial system of the world. You think coming to the realization that you education is worthless is bad imagine destroying the world economy and all the death that would cause. I don’t think there are too many that could deal with that, so its easier for them to rationalize that they are just right and have to try harder than admit to themselves the obvious .

I am fascinated by economics and have a strength in concepts, I am self taught in economics and have taken another tack from your, in my opinion cocky view. When I read a quote or paper that appeals to my reason I pursue that authors other works. I’ve read Mises, Keynes, Bastiat, Jefferson, Friedman, Taleb, Smith ect. I have also attempted reading other works such as Krugman, their teachings immediately assault my logic and I cannot follow through. Many of Keynes’s thoughts defied my logic but others were intriguing and he in of his self was a very intelligent man that I admire, that said I think he would roll over in his grave if he saw what was being done in the name of his teachings. I think this is a healthier way of going about learning economics.

What is your background in economics by the way?

John, one more quick point. You have been discussing instruments that mostly use derivatives to hedge against inflation. These are the “weapons of mass financial destruction” your referring too right, that if large credit market events happen would never be able to be filled. Ok I think I have a pretty good idea of where your mind is. You stomp your feet saying that we don’t understand but I think you need to look in the mirror. I think you need to read a few economics history books about how bonds, equities, currencies, and gold have treated their holders in the. Cant do that with derivatives since they are so young, but they have done plenty of damage already.


"that if large credit market events happen would never be able to be filled"
Nonsense. Many derivatives are marked to market daily and traded on exchanges.

" You stomp your feet saying that we don’t understand"
Hardly. I shake my head at stupid people.

" I think you need to look in the mirror."
You mean the one that says named chairs at major universities, gajillion of pubs, CFA charterholder, hedge fund owner, etc.? That mirror says I know vastly more about anything in finance than you could ever learn.

" I think you need to read a few economics history "
I wrote one....

"To get a PHD in economics from a prestigious school they will have to spend 300k for their education and 7 years of their life where they could have easily earned just as much."
This obviously isn't true. Nobody with a real Ph.D. spends any money getting one. I got mine supported by fellowship money that paid all my school expenses and then gave me a living stipend that paid for rent, gas, car payment, food (since I had a wife and kid I had to do some consulting to pay all my bills).

"To then come to the conclusion that what they learned was incorrect would be to admit that even the education was for naught and they wasted 600 thousand dollars."

"I have been self-taught in economics,"
Except you are obviously unlearned. Sorry.

"I am fascinated by economics and have a strength in concepts, I am self taught in economics and have taken another tack from your, in my opinion cocky view."
Sorry buddy but I am certain you couldn't pass many uncontroversial exams sitting in my file drawer.


Ok now I know where you’re coming from. You are a professor, a PHD, a hedge fund manager and a writer. If that were true, why and how, are you free during 4 hours of a day that the markets are open? I work 3 weeks on 3 off, what’s your excuse. Please no one listen to this joke, I’d say he’s an econ under grad, it would explain a lot.

If you are by chance a hedge fund manager, don’t you have a fiduciary duty to your clients? I don’t think I’d be very happy if I found out you were playing on yahoo with people you think are morons. Hedge funds for the most part get pummeled by index funds right? Probably the hubris you show. Professor and writer, hmm when do you find the time to fit in classes, office hours, studies, managing your hedge fund, and playing on yahoo.

BANG!!!…I think I hit the nail on the head.


"ou are a professor, a PHD, a hedge fund manager and a writer."
All profs are writers and most are Ph.D's. I sold my fund almost 5 years ago and retired.

"If you are by chance a hedge fund manager, don’t you have a fiduciary duty to your clients? "
Obviously I did, but even when I was running my fund you can take time off and still be doing your fiduciary duty.

"Hedge funds for the most part get pummeled by index funds right?"
There is not a competition as I provided access to uncorrelated risks. Nobody should invest in hedge funds until they have substantial exposure to much cheaper risks (like index funds).


Ok John we could go on and on. I don’t think you are unintelligent by any means but I do think your economic view is wrong. Hey maybe I’ll end up being wrong, but with 58 trill in total credit market debt and 17 trill in national income I don’t see to many ways out. That wasn’t even 1 to 1 when Volker killed inflation last time.

Here are my thoughts originally voiced by Mises:

"There is no means to avoiding the final collapse of a boom brought on by credit expansion. The alternative is only whether the crisis should come sooner as a result of voluntary abandonment of further credit expansion, or later as a final total catastrophe of the currency involved"

Different nations have different tools but I have not seen a case in history where this quote has not been true. The booms and busts of the 19th century were caused by credit expansion, the Great Depression was caused by it, the abandonment of the Breton Woods (closing the gold window) system was caused by it, and the ongoing debt crisis we are in now was caused by it. Here’s my question to someone who clearly thinks he is right all the time, what if your wrong? What if there is a collapse, will your derivatives protect you? What in your opinion would protect someone financially in that kind of an environment? Some current economies have be able to stave off that final collapse but as sited by the IMF paper that just came out it looks like we are pushing the limits of most nations monetary tools.

Here’s all I want, as this the next few years pass, and economic ramifications of that aforementioned debt continues, show up once in a while on yahoo gold stories and share your views.


"but I do think your economic view is wrong"
Why would anyone care what you think? Why do you care what you think? You clearly know nothing....


"Why would anyone care what you think? Why do you care what you think? You clearly know nothing....

Lol, Profound there John. Why would anyone care about a yahoo chat? Its just for fun there bud.


"Lol, Profound there John. Why would anyone care about a yahoo chat? Its just for fun there bud. "
It should be educational if you dont know anything....


John, I’m going to assume that you are telling the truth. There were some guys who were a lot like you, well-educated PHD’s that thought they were smarter than the markets, I’m sure you know all about them, they thought they were smart enough to game the markets, and for a time did. There value was measured at one point in the billions and ended up with nothing. There intelligence and academic pedigree was unparalleled, and though I’m sure you think a lot of yourself you would pale in comparison. They ended up not only going broke themselves, they lost money for all of their clients, and damaged our entire financial system all because of similar Hubris you exhibit. Who were they? Robert C. Merton and Myron S Scholes originators of Long Term Capital Management. I’m not trying to lecture you on things you already know but it may help to step back and be a little more humble. Your fund also is no longer with us and I find it interesting that it happed 5 years ago after a market crash, did you decided to sell after that market crash? If so I have a feeling it wasn’t your decision, that said your Jr analysis that were making as much as I make, well they no longer have jobs at your defunct hedge fund. Save the explanations by the way you could make up anything.

Next you state that your point on yahoo was to educate but told me to forget about Hayek and Friedman, oh yeah I’m going to forget them and listen to a post on yahoo. This from a guy who says to forget gold and silver, that has a proven track record over 5000 years as a store of value and use derivatives instead. Hell they are so young they really don’t have a track record. I’m not a huge fan of Warren, but there is no doubt he is one of if not the most successful investor of the past 50 years, and he said derivatives are “weapons of mass financial destruction”. Other smart individuals have similar views. But oh yeah John’s got it right.

Economics is a social science, not a hard science. Math can be used in economics for two thing well, looking at the past and the present but is very limited in determine the future. The thumbs up I am getting and the thumbs down that you are getting tell me that there are a lot out there that think like me, and want physical metal. Not a lot, I have less then 10% of my investible funds in it. But if just a few more people want delivery at the comex things will get very interesting.


My academic credentials do not pale compared to those guys (though I have no Nobel). My hedge fund was more successful than LTCM. BSM option pricing is a tint exercise in stochastoc calculus and I can absoluitely run rings around those guys in stochastic calc.

My fund is with us just being run by my partners. Running a hedge fund is a terrible job. You can make great money but I found it impossible to enjoy my life or even sleep decently. So I had enough money and offered them a price and left.


Lol not saying a lot that your fund was more successful than LTCM, my bank account is more successful than LTCM. I figured you would not be able to resist coming up with a reason you got out of the hedge fund business after a crash.

What are your thoughts on the Mises quote I threw out there yesterday.

"There is no means to avoiding the final collapse of a boom brought on by credit expansion. The alternative is only whether the crisis should come sooner as a result of voluntary abandonment of further credit expansion, or later as a final total catastrophe of the currency involved"

I look at total credit market debt from the Bretton Woods to 2007 and I see pretty much a perfect exponential chart, where the national income, GDP, used to support that debt was linear. It looked unsustainable. This was the perpetual boom through credit creation that Keynes wanted. Then something went very wrong in 2008 and if the system was left to its own devices would have completed the collapse Mises is talking about. The only thing that prevented that collapse was pure debt monetization by the fed. It appears to me a debt based monetary system must grow exponentially and eventually will run head first into the limits of a physical world. Said another way as soon as the credit and money in the system is growing at a rate the productive capacities of the economy cannot keep up with the system will break by one of the two ways Mises sites.

You say that you are on here for education, well please explain, without snarky comments, why this conclusion is incorrect. It only seems like the powers that be are only attempting to get credit creation back on its exponential climb out of necessity for the monetary system but are having no effect on the ability to service that debt, GDP.

There are some pretty smart people out there like Dr. Chris Martenson, and successful fund managers such as Kyle Bass and Bill Gross, that have come to similar conclusions. Why is John the guy I should listen too? They appeal to my reason, it has served me pretty well so far, so unless you can explain yourself in a way that makes sense I will continue to follow what seems rational to me. If your right I hope you can sway me, but I have a feeling your just going to say I am too stupid to understand, but my IQ says differently. I’ve never had the PHD’s I work with in the oil and gas industry for one second act like that is the case when they explain things.


" I figured you would not be able to resist coming up with a reason you got out of the hedge fund business after a crash. "
We made tons of money in the crash. Events like that are why you invest in hedge funds.

"What are your thoughts on the Mises quote I threw out there yesterday"
That taking von Mises out of context and without knowing anything about econ is amateur stupid.

" The only thing that prevented that collapse was pure debt monetization by the fed."
Which has never happened so I guess that can't be right.

" It appears to me a debt based monetary system must grow exponentially and eventually will run head first into the limits of a physical world."
That's because you haven't so much as sat through undergrad econ 101.

"You say that you are on here for education, well please explain, without snarky comments, why this conclusion is incorrect."
Because no part of it is correct and you apparently have not a local newspaper level clue of what has happened.


“That taking von Mises out of context and without knowing anything about econ is amateur stupid.”

I think the real reason is you can’t explain it. I also have serious doubts about someone who teaches that continually berates someone as stupid. Mises is clear as can be and it has played out in the 1830’s, countless times in the rest of the19th century, 1906, and a big credit created bust in the Great Depression, each time they attempted to patch a system that was inherently flawed. They got the system to last for 60+years but even all those patches are not going to change the premise Mises voiced. How exactly did I take him out of context? Let me guess, too stupid to understand.

“That's because you haven't so much as sat through undergrad econ 101.”

I did take Econ 101 as an undergrad, but that said, why then do some that have high levels of education in economics voice many of the same concerns I have brought up. Do they also not possess this knowledge. I may struggle with PHD level econometrics but I could certainly understand econ 101 so, oh great one, what specifically are you referring too. I think you won’t actually expound on your thoughts because deep down your full of it.

“Which has never happened so I guess that can't be right.”

How can you say that? The fed created money and swapped it with debt through out the QE programs. I’m of the opinion that until they prove that they can reverse it, it was monetization.

“Because no part of it is correct and you apparently have not a local newspaper level clue of what has happened.”

Once again that’s a cop out. I just can’t imagine someone of your stated stature being so unprofessional.

How old are you by the way?


Aight. I’m sticking to my previous assumption that you are probably between 22-24 years old, a Sr or early on in post grad work. You know what a Jr Analyst, I checked with an attorney friend of mine at the fed who graduated Princeton in ’03, he said my pay is about the same or a little higher then a Jr Analyst at a hedge fund. You have a good understanding of econometrics, and know prominent economists which would be expected. Still nothing that would suggest any higher levels of accomplishment than aforementioned. Why don’t I think you are who you say you are? Your comments are juvenile and unprofessional. If you take the time to argue with me why would you not explain yourself? When you are backed to a point where you should have to explain yourself you never follow through, that is when the “stupid” and smart ass comments come out, once again just like a kid would do.

I need forums like this to attempt to sharpen and organize my thoughts; there aren’t many people that run in my circles that I could have these discussions with, not to mention arguments are not good for personal relationships. Your online persona on the other hand should have plenty of people not only to educate but also debate. That makes me think once again your trolling yahoo, because #1 you want to pretend you are someone you’re not, and #2 your classmates all know what you know and think along the same lines. Good luck but when, and if you actually start to learn how the world works you will look back at your former self and laugh.


Sun, 01/05/2014 - 18:21 | 4302601 IrritableBowels
IrritableBowels's picture

I didn't read this, of course, but I did catch the phrase, "trolling yahoo."

how about trolling ZH? Oh, wait a minute...


Sun, 01/05/2014 - 12:41 | 4301758 fijisailor
fijisailor's picture

Correspondence between the German financial journalist Lars Schall and Germany's Bundesbank suggests that the small amount of gold the Bundesbank claims recently to have repatriated from the Federal Reserve Bank of New York was not returned in the form in which it was deposited many years ago -- that, indeed, the original German gold was not and is not available to be returned because something undisclosed was done with it.

Sun, 01/05/2014 - 12:57 | 4301785 Spumoni
Spumoni's picture

Well, I only know one economist. He has a B.Lit. in Econ from Oxford (they award that one about every hundred years) and 60 years experience among the IMF/WorldBank/OECD bunch. We found ourselves discussing the Treasury's printing press. He wouldn't discuss whether it was smart or not. His only comments were: 1) That was all they could do in the circumstances, and 2) It would have been far worse for everyone if they hadn't QE'd.

I view this as a proof that globalism has changed the matrix so violently that we need a new paradigm. Malthus, Keynes, and all the rest of the old school made do with the 19th and 20th centuries. Not one whit of their thoughts attach to the modern economic arena, which would have been impossible to imagine in 1950. If the best "they" could do was flush the entire working class down the shitter to prop up an outdated and criminally-inclined machine, then "they" need to be replaced. As does modern economic theory.

Sun, 01/05/2014 - 13:42 | 4301873 sunnyside
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I think there is some truth in his statement, because this is just as much or more of failure of government and fiscal policy as monetary policy.  Bernanke should of told Schumer "No, asshole, you get to work!"

Sun, 01/05/2014 - 13:33 | 4301852 sixbilliondollarman
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(so give me yours...)

Sun, 01/05/2014 - 13:40 | 4301863 GOSPLAN HERO
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The troll "Chas Caldwell" on Market Watch is a  gold hating mofo.

Sun, 01/05/2014 - 13:38 | 4301865 sunnyside
sunnyside's picture

If there is truth to a gold:silver price ratio of about  15:1, then should gold be selling for around $350 or silver be up around $75?

Sun, 01/05/2014 - 13:48 | 4301881 Sufiy
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Jesse: COMEX Gold Registered Inventory Potential Claims Still Historically High 80 to 1

Jesse reports that COMEX is still leveraged at the record levels of 80 owners per one oz of Gold. Next week will be very important for Gold market. The move above $1260 will bring more short covering and will bring more confirmation on Double Bottom retested in 2013 at $1180 level.

Sun, 01/05/2014 - 16:51 | 4302327 Non Passaran
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And you couldn't link directly to Jesse because I suppose (didn't check and never will) you had something valuable to add?
Fucking spammer.

Sun, 01/05/2014 - 21:50 | 4303167 Koevoet
Koevoet's picture

> N2OJoe : In the late 1400's some people believed the world was round. The scientiest of the day told them they were wrong for so long,
? why would anyone believe them now?

Actually, not true. THe ancient Greeks established the shape of the Earth and measured its circumference wo within abuot 3%. In the late 1400s, every educated person knew this.

The reason Colombus was ridiculed that that the educated people could esitmate the distance from Eurpoe to Asia and knew that the ships of the day could not carry provisions for a trip that long. Plus scurvy had not been solved and the crew coulc not last that long witout fresh food. And indeed, Colombs was nearly out of supplies when he bumped into the Americas.

There is speculation that Colombus in fact knew that there was land there from looking at old Viking maps. But that's just speculation.


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